Sri Lanka charges steep tax on brown sugar

ECONOMYNEXT – Sri Lanka has raised a tax on white sugar to 2.0 per kilogram, while brown sugar will be charged a tax of 15 rupees, the Finance Ministry said.

The taxes had been raised by midnight gazette.Often the Finance Ministry does not even inform the people that import taxes have been raised.

In Sri Lanka the native rulers who took control of a taxation system set up by British colonial rule raise taxes at midnight while citizens are sleeping, without prior discussion or parliamentary approval, violating the basic democratic principle of ‘taxation by consent’.

Attempts to hike value added tax by newspaper advertisement was thwarted by activists this year.

But many import taxes are slapped by minister’s prerogative and a docile parliament rubber stamps them later, in a mockery of representative government critics say.

The tax on brown sugar was originally hiked during the Rajapaksa regime to give excess profits to a politically powerful businessman who controlled a domestic sugar firm at the time. Now sugar firms are owned by the state.

The finance ministry said retail price of white sugar will remain at a controlled price of 95 rupees a kilogram, despite the tax hike.

Packed brown sugar was already selling around 120-125 rupees a kilogram.

The high taxes tend to encourage refined white sugar over, brown, which contain some molasses.

The new taxes come as the state and the elected ruling class using its interventionist powers to discourage sugar use by citizens. (Colombo/Sept23/2016)





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