Hike in Special Goods Tax on imported potatoes

With the intention of safeguarding local potato farmers, the Government has increased the Special Goods Tax on imported potatoes from Rs. 40 from Rs. 35 per kilogram. 

The revised Special Goods Tax on potatoes became effective from midnight on 24 August.

The Finance Ministry said the aim of the Government was to fetch a better price for the local farmer as the domestic harvest has started reaching the market. 

The decision was taken subsequent to repeated requests by local potato farmers to provide them a better price.

The annual consumption of potatoes in Sri Lanka is about 180,000 metric tons and 70% of the requirement is imported.  The Government spends Rs. 4.8 billion annually to import the required potatoes.

The increase in tax on imported potatoes was introduced in order to save this huge sum of foreign exchange while encouraging the local farmers who provide the balance 30% produce to the market. This will also be expected to fetch a higher price for local potatoes and increase the productivity in potato cultivation.

However, the increase in Special Goods Tax on potatoes will not affect the consumer as a maximum price control is currently effective on potatoes.