ECONOMYNEXT – Sri Lanka’s Ministry of Finance said it would introduce guaranteed prices for several locally grown crops, waive interest on loans taken by farmers and cut fertilizer prices.
A statement said a guaranteed price scheme will be introduced for paddy, onion and potatoes produced locally by farmers.
A Special Commodity Levy on imports will be raised during harvesting period to protect farmers through remunerative guaranteed prices, it said.
“As potatoes and B-Onions are being harvested, SCL on potatoes and B-Onions will be maintained at 40 rupees a kilo.”
Interest and the penal interest incurred by farmers and small paddy mill owners on loans up to a maximum of 50 million rupees from all commercial banks during the past three years, will be written off in full and will be borne by the government, the finance ministry said.
This was to mitigate the impact of adverse weather conditions which resulted in farmers losing their livelihood and becoming heavily indebted.
Fertilizer prices for paddy will be maintained at 500 rupee per 50 kilo bag and fertilizer prices for other crops will be reduced to 1,000 rupees a 50 kilo bag from 1,500 rupees.
The government would also extend the concessionary 14 percent maximum tax on agriculture to individuals, reducing the tax from 24 percent so that individual farming agriculture is also encouraged.
“The concessionary income tax rate of 14% on agriculture is presently applied only for the companies engaged in agricultural businesses,” the ministry said.
"The necessary Gazettes for the aforementioned tax related proposals will be issued today and Cabinet approval is sought to amend the necessary tax laws," the Finance Ministry statement said.
In Sri Lanka though the parliamnet is in theory in control of finances, some import taxes are changed through midnight gazette by decree. The statement came as Sri Lanka is in the grip of a political crisis after President Maithripala Sirisena appointed Mahinda Rajapaksa as Prime Minister and Finance Minister and the parliament is suspended. (COLOMBO, 01 November, 2018)