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Thursday July 18th, 2024

Sri Lanka slashes onion, lentil, tinned fish, and sugar import tax to 25 cents a kilo

ECONOMYNEXT – Sri Lanka has slashed an import tax on lentils, tinned fish and sugar to 25 cents from an earlier 50 to 100 rupees a kilogram from midnight on October 14.

The Special Commodity Levy, an all-inclusive simple para-tariff on tinned fish (mackerel, tuna, sardines, anchovies, salmon) has been brought down from an existing 100 rupees per kilogram.

Tinned fish taxes are kept high to give tax arbitrage super profits to crony-mercantilist, import substitution businesses, critics say.

Crony businesses have strengthened their claims claiming to ‘save foreign exchange’ after a soft-pegged central bank was set up in 1950 started creating monetary instability with liquidity injections. Analysts have called for central bank reform to stop monetary instability.

Amid a Coroanvirus crisis many imports have been banned.

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The SCL on sugar has been brought down from 50 rupees a kilogram to 25 cents. Sugar taxes give profits to a loss making expropriated sugar company.

The SCL on Mysore dhal (red lentils) had been brought down from 5 rupee a kilo (whole) and 10 rupees (split) to 25 cents a kilogram. Yellow lentils tax had also been brought down from an earlier 5 rupees (whole) and 10 rupees (split) a kilogram.

Taxes on onions have been brought down from an earlier 50 rupees a kilogram.

In Sri Lanka taxes are brought down by midnight gazette without prior notice, bringing large losses to importers who cleared the goods shortly before.

The mid-night gazette is one of the key sources of regime uncertainty (a fluid operating regime for businesses), that raises business risks and undermines the economy.

Sri Lanka has in the past cut taxes by midnight gazette and imposed price controls on retailers who had bought stocks at earlier prices, imposing sweeping losses on small businesses. (Colombo/Oct14/2020)

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Sri Lanka to conduct threat assessments for presidential candidates

ECONOMYNEXT – Sri Lanka’s President Ranil Wickremesinghe has submitted a cabinet paper proposing security measures for presidential candidates and former presidents, following the recent attack on former US President Donald Trump during a campaign rally in the USA.

“This proposal suggests the appointment of a committee to conduct threat assessments and provide necessary security for Presidential candidates as well as former Presidents,” a statement from his media division said.

The committee will include the Secretary of the Ministry of Public Security as Chair, the Chief of Defence Staff, the Inspector General of Police, the Chief of National Intelligence, and the Senior Deputy Inspector General of Police/Elections.

A Deputy Inspector General of Police will be appointed to oversee all security arrangements.

The committee and the designated officer will work closely with the Election Commission to ensure seamless coordination of security arrangements, the PMD said.

After today, July 17, Sri Lanka’s Election Committee is empowered to announce a date for the presidential polls due to be held this year.

Minister of Foreign Affairs M U M Ali Sabry has said the election will be held on October 5 or 12.

Members of the Samagi Jana Balawegaya (SJB) have said that the government should be accountable for the security of Opposition Leader Sajith Premadasa, the SJB’s presidential candidate. (Colombo/Jul17/2024)

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Sri Lanka rupee closes flat at 303.80/304.00 to US dollar

ECONOMYNEXT – Sri Lanka’s rupee closed almost flat at 303.80/304.00 to the US dollar on Wednesday, from 303.70/304.00 to the US dollar on Tuesday, dealers said, while bond yields were down.

A bond maturing on 15.12.2026 closed at 10.60/75 percent, down from 10.82/92 percent.

A bond maturing on 15.12.2027 closed at 11.60/38 percent, down from 11.65/75 percent.

A bond maturing on 01.05.2028 closed at 11.72/78 percent, down from 11.80/90 percent.

A bond maturing on 15.09.2029 closed at 12.05/10 percent, down from 12.05/20 percent. (Colombo/Jul17/2024)

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Sri Lanka stocks close down, John Keells, Hemas, Hayleys push turnover

ECONOMYNEXT – The Colombo Stock Exchange closed down on Wednesday, data on its site showed.

The broader All Share Index closed down 0.41 percent, or 48.44 points, at 11,830; while the more liquid S&P SL20 Index closed down 0.52 percent, or 17.91 points, at 3,456.

Turnover was 1.2 million. A big part of this (Rs597mn) came from John Keells Holdings Plc (down at 194.25).

“There was foreign buying interest on John Keells and Hemas,” Softlogic Stockbrokers said.

“We saw foreign interest in selective counters persist.”

Hemas Holdings Plc contributed Rs143mn to the turnover, and the share closed down at 81.10.

Hayleys Plc contributed Rs156mn to the turnover, and the share closed up at 101.50.

The three crossings made up 67 percent of the turnover.

The capital goods counters, with all the bluechips, was the leading sector contributing to the day’s turnover.

With the exception of Hayleys and a couple of other companies, the counter saw most stocks close down or flat.

Sentiment around the banking counters also remained negative.

“The volatility in investor sentiments persisted. There are a lot of spectators in the market over the last few weeks, despite some positive news coming in.”

Treasury bill and bond rates have also dropped.

The top contributors to the ASPI were Melstacorp Plc (up at 86.00), SMB Finance Plc (up at 0.70), and TeeJay Lanka Plc (up at 40.00).

There was a net foreign inflow of 392 million. (Colombo/Jul17/2024)

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