Beverage prices to reduce 30% on tax cuts

Saturday, 1 December 2018 02:06 - - {{hitsCtrl.values.hits}}

Tax relief given to carbonated drinks and juices to increase incentives for local producers

Beverage prices are expected to drop by as much as 30% after a decision made by the Finance Ministry to reduce taxes charged on sugar, a statement said yesterday.

Finance Minister Mahinda Rajapaksa, who was appointed by President Maithripala Sirisena, after discussions with the beverage and biscuit manufacturing companies, had agreed to reduce taxes that were imposed earlier this year to reduce sugar consumption in the country.

“Under this new agreement, sugar up to 6g in carbonated drinks and sugar up to 9g in fruit juices will be exempt from tax. The earlier tax of 50 cents on 1g of sugar has been reduced to 30 cents. These two measures together would reduce beverage prices by as much as 30%,” the statement issued by Rajapaksa’s Office said.

The discussion had been held during the National Economic Council (NEC) meeting presided over by Rajapaksa where the impact of the taxes had been discussed. The sugar taxes were imposed earlier this year as a measure to reduce non-communicable disease in Sri Lanka including diabetes.

“The reduction of these taxes will provide an incentive to small producers and allows them to increase production. The focus is to give these smaller companies assistance through the reduction of taxes,” the statement added.