Private retailers win in CoL fight

Thursday, 21 December 2017 00:00 - - {{hitsCtrl.values.hits}}

By Skandha Gunasekara

The Cabinet Subcommittee on the Cost of Living has decided to reimburse 50% of the income tax paid by private retail outlets and institutions participating in the Government program to distribute budget packs containing essential food items.

According to the proposal made by Prime Minister Ranil Wickremesinghe to the Cabinet of Ministers in his capacity as the Minister of National Policies and Economic Affairs, a program is to be implemented to “distribute a budget pack of essential food items which includes rice, lentils, sugar, sprats, onion, potato and mackerel, through private supermarket chains, Sathosa and other private shops until the Sinhala/Tamil New Year season as a remedial measure for the high cost of living.”

To provide compensation for the costs borne by private retail outlets, the Government has proposed to grant incentives such as reimbursing 50% of paid income tax and concessional electricity tariff incentives for the outlets of the participating institutions and retailers.

“It depends on the requirements of the private sector and their sale of goods. The plan is to request them to sell essential goods at the landed cost, without adding transport and warehouse charges,” Finance Ministry Spokesman A. Hassen told the Daily FT.

“The program will be launched next week. Main supermarkets such as Keells, Cargills Food City and Arpico from the private sector as well as Lak Sathosa will take part in this program.”

“As a state institute we do not pay income tax. However, we were informed that we would be given various concessions including electricity tariffs,” Sathosa Acting Chairman Rizwan Hameem said.

In addition, the Cabinet Committee on Economic Affairs decided to establish a Family Budget Unit to review overall supply of essential items at affordable prices for households.

The functions of the Family Budget Unit include monitoring the prices of food items weekly and reporting to the Cabinet Subcommittee on the Cost of Living and to the CCEM. Their duties also include monitoring climate forecast and assessing its impact on food production, the preparation of a Food Production Forecast in coordination with the Ministries of Agriculture, Plantation Industries, Fisheries and Rural Economy periodically.

They will also monitor the Food Supply Chain in coordination with Lanka Sathosa, the Paddy Marketing Board, regional economic centres and the private sector.

The unit is also charged with monitoring the availability of fertiliser in a timely manner, monitoring the prices of fuel, transport and warehousing, recommending short- and medium-term measures to be taken to increase domestic food production and improving supply chain management to reduce the cost of living. They will report to the Cabinet Subcommittee on the Cost of Living and to the CCEM to coordinate and ensure effective distribution along with the private sector.