SL importers hurriedly import goods to capitalize from VAT hike
By: Staff Writer
Colombo (LNW): Sri Lankan importers are proactively increasing container imports, placing orders hurriedly and deliberately exploiting January VAT surge with a sole purpose of earning profits by selling their commodity stocks at high prices, the finance ministry disclosed.
Importers are exceeding their daily imports of containers to capitalize from VAT hike in January, Finance State Minister Ranjith Siyambalapitiya claimed.
Addressing the media, he said the daily container imports, which were 700, had suddenly increased to beyond 1,000, causing huge congestion at the port to release them.
“The trick of these importers is to sell these goods at a higher price with the VAT by completing the clearance process before January 1, when the VAT will be increased to 18%,” the Minister said.
He mentioned that it is also the responsibility of the media to intervene to stop such actions.
Meanwhile, the minister also commented on the need to raise the price of alcohol again due to the increase in VAT.
He said that although goods like fuel, gas, and chemical fertilisers are subject to VAT, the price of non-essential goods like alcohol will increase due to the decision to exempt ports and airports fees.
The deficit in the merchandise trade account narrowed to US dollars 390 million in November 2023, compared to the deficit of US dollars 449 million recorded in November 2022 as well as US dollars 683 million recorded in October 2023.
In the meantime, the cumulative deficit in the trade account during January to November 2023 narrowed to US dollars 4,414 million from US dollars 4,827 million recorded over the same period in 2022.
Due to the inaction of the Customs officials, a large number of containers, including essential food, are caught in heavy traffic in the port, the All Island United Container Transport Owners’ Association (AIUCTOA) said.
AIUCTOA president Sanath Manjula told Ports, Shipping, and Aviation Minister Nimal Siripala de Silva during his official visit to the Ports Authority that the traffic situation has been created artificially by the wharf clerks.
Many containers, including potatoes and onions, are stuck at the port.The wharf clerks take money underhand to release container lorries, Manjula said, adding that there was a system to release container trucks by the drivers themselves. But the wharf clerks interfere and create this artificial traffic.
He complained to Minister Silva to introduce a new system to clear the issues and also told the Minister to take this issue to the President for a new system.
“If these containers are not released soon, the congestion will increase. This situation will also affect the country’s economy,” the association president said.