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Tuesday September 26th, 2023

Sri Lanka mulls import taxes or looser licenses for wheat flour: Minister

ECONOMYNEXT – Sri Lanka is mulling looser import licenses or an import duty on wheat flour State Minister of Finance Ranjith Siyambalapitiya told parliament after a brewing controversy over import controls that recreated a duopoly.

“We are discussing whether there is an alternative to the restrictive import license policy that is now followed within the Finance Ministry, Trade Ministry and Agriculture Ministry,” Minister Siyambalapitiya told parliament.

“In the future we expect to widen the permits to bring the required volume of wheat. Or we can revise the import tax, since the existing stocks are now lower.”

Minister Siyambalapitiya claimed imports were restricted, giving a controversial duopoly to two wheat millers because there were 163,000 tonnes of wheat flour in the country.

He claimed that the holders would make profits if a tax was raised. to protect rice farmers. Global market prices were falling, he said.

Opposition legislators had slammed the import license which reduced the food freedoms of the people and recreated a duopoly among two millers at a time when global prices were easing, giving large profits to the companies.

About 1.35 kilograms of wheat grain is required to produce 1 kilogram of wheat flour, Minister Siyambalapitiya said.

Based on calculations by the Consumer Affairs Authority and Customs data, flour from milled grain imported in June can be sold at 192.39 rupees a kilogram with a 9.63 percent profit, Minister Siyambalapitiya said.

In July the cost went up to 203.62 rupees a kilo, he said.

Milling generates by products which can be sold or exported as animal feed. It is not clear whether the revenue was used in the calculations.

Imported flour could be sold at 197.62 with a 5 percent margin, he said.

Opposition legislators had protested that wheat flour was taxed at 35 rupees a kilogram while grain was only taxed at 3 rupees.

Therefore, the state was losing tax revenues and consumers were paying higher prices, they said.

Meanwhile Minister Siyabalapitiya said after restricting imports it was gazetted as a listed item by the Consumer Affairs Authority to impose price controls in another state intervention.

The CAA frequently creates shortages by artificially price controls. The latest debacle involved price controls on eggs, while import duties and licenses restricted the import of maize, the main ingredient in chicken feed.

In another state interference, the CAA has also banned the use of paddy in chicken feed.

In yet another state intervention, Minister Siyambapalapitiya said wheat prices were kept high to keep rice prices high and give profits to farmers.

Sri Lanka is expected to have a good rice harvest this year and low wheat prices could reduce the demand and farmers will start protesting, he said.

Due to long term protection Sri Lanka farmers do not produce exportable grades of rice, unlike their counterparts in Pakistan and India.

Wheat flour imports cost foreign exchange, he said.

Sri Lanka’s macro-economists usually print money to cut rates triggering foreign exchange shortages leading to entire economic plans being made to ‘save foreign exchange’ at the cost of economic inefficiency and free trade.

As a result of running ‘macro-economic policy despite having a pegged exchange rate, Sri Lanka has long run various protectionist tax arbitrage schemes, driving potential state revenues to profiteering producers on the claim that it saved ‘foreign exchange.’

Sri Lanka has controls on rice, maize and other cereals to give profits to various ‘domestic producers’ at the expense of the less affluent sections of the public.

Essential goods like food and building materials involving hunger and homelessness are ideal products for profiteers, critics say. (Colombo/Aug30/2023)

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Sri Lanka cabinet okays appropriation bill for 2024 budget

ECONOMYNEXT – Sri Lanka’s cabinet of ministers had approved a draft Appropriation Act for 2024, the state information office said.

The Finance Minister’s proposal to gazette the bill and table it in parliament was approved by the cabinet.

Presenting the appropriation bill is the first stage of presenting a budget for 2024,

The appropriation bills set outs the expenditure plans for each ministry.

The budget proposals, made in November is called the second reading of the Appropriation Act. (Colombo/Sept24/2023)

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Sri Lanka’s MEPA to get 28.5 mn rupees from Singaporean AEPW, for beach clean up

ECONOMYNEXT – Sri Lanka’s Marine Environment Protection Authority (MEPA) is to receive 5.7 million rupees a year, for five years, from Singapore-based marine waste solutions provider, Alliance to End Plastic Waste (AEPW), to maintain 8 beach cleaner machines.

The donation is meant to support MEPA clean coastal areas across Sri Lanka, using BeachTech Hydro Sweepy beach cleaner machines, previously donated by the organisation.

The oil industry-founded non-governmental organisation donated the 8 beach cleaners worth about US$180,000 to MEPA in the wake of the 2021 MV X-press Pearl ship disaster.

The machines manufactured by Kässbohrer Geländefahrzeug AG, a German company, are effective at cleaning up plastic nurdles and other types of potentially harmful non-biodegradable waste, minimising human contact with hazardous materials.

As a significant amount of money is spent for the deployment of these machines for beach cleaning activities, the Alliance to End Plastic Waste has agreed to provide the funds for the upkeep of the machines for a period of five years.

With this financial donation, the Maritime Environment Protection Authority will be able to continue using these machines without interruption to clean identified beaches in the future. (Colombo/Sep26/2023)

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Sri Lanka’s SEC makes four new appointments

ECONOMYNEXT – The Securities and Exchange Commission of Sri Lanka (SEC) made four new additions from diverse backgrounds to its leadership.

These appointments are expected to increase the effectiveness of the SEC secretariat in the respective operating areas, the SEC said.

Manuri Weerasinghe, with over 20 years of experience in accounting, financial management, financial reporting and auditing, was appointed Director, Corporate Affairs.

She is a Fellow Member of CA Sri Lanka, member of the Chartered Institute of Management Accountants and a member of the Certified Practicing Accountants of Australia.

Her academic credentials include a Master of Business Administration and a BSc (Hons) in Accountancy and Financial Management (Special).

Prior to joining the SEC, she served in several financial management positions in Bermuda and Sweden.

Madura P R Wanigasekara was appointed Chief Digital Officer. He has over 20 years delivering and managing IT solutions, and has held several senior management positions in the public and private sectors.

His academic qualifications include a Master of Science in Information Technology from the University of Colombo and a Bachelor of Information Technology from the Curtin University of Technology.

He is also a member of the Australian Computer Society (ACS).

Sharmila Panditaratne was appointed Assistant Director, Legal and Enforcement.

She is an Attorney-at-Law with over 21 years of experience as a securities market regulator.

She holds a Master of Laws degree from the University of Houston, Texas and has worked at two law firms in the USA prior to joining the SEC.

Riyaz Bary, Deputy Solicitor General at the Attorney General’s Department was appointed a Director on secondment basis. (Colombo/Sep26/2023)

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