Majority of Sri Lankans against protectionist taxes: survey

Paddy farmers are protected in Sri Lanka and provided free inputs including water and fertilizer. Source: FAO Photo.

ECONOMYNEXT – Advocata, a Colombo-based think tank, said 57 percent of Sri Lankans are against paying a higher price for food and 76 percent opposed paying more for construction materials to protect the local industries, in a new survey.

Advocata had surveyed 855 respondents across 8 provinces in door-to-door interviews.

Opposition to protectionist taxes on food items was highest in the Southern Province, where 78 percent of respondents said they would rather have cheaper food.

However, residents in North Central (64 percent) and Sabaragamuwa province (61 percent) were in favor of protectionist taxes.

The North Central Province is Sri Lanka’s largest paddy producer, generating a quarter of the total paddy output in the 2019 Maha season.

Rice is one of the heavily protected sectors in Sri Lanka, with imports only allowed for specialties such as Basmati, which does not grow well in the country. Farmers are also provided free water and fertilizer.

Maize also has protectionist taxes and permit-based imports, which push up input costs of poultry and dairy industries.

Other major foods including fruits and vegetables, dairy, macaroni, noodles, couscous and similar products are also protected to benefit the politically influential.

Meanwhile, the Advocata survey also showed 76 percent of Sri Lankans opining that they do not wish to pay extra for construction material to protect domestic industries.

Highest opposition to protectionism in construction was in the North Western Province at 93 percent.

North Central and Sabaragamuwa Province respondents were the most inclined to believe in protecting domestic industries, with 45 percent and 49 percent respectively in favour.

Housing developer Iconic had earlier in 2019 said that it could cut the prices of houses by 30 percent if protectionist taxes are removed. (Colombo/Dec13/2019)