by Melani Manel Perera

The government has done away with value-added tax on a range of essential foods, from flour to sugar, in a bid to keep prices down. The people have responded favourably.

Colombo (AsiaNews) – The government has taken steps to keep prices on 10 basic food items down. The people have commented favourably about this, however they are complaining because it is not always possible to find the products in question. 

Bandula Gunawardana, Minister for Trade, Marketing Development, Co-operatives and Consumers Services, said the government has removed value-added tax (VAT) from rice, flour, sugar, dhal (a frequently used legume), potatoes, salt, gram, green gram (a sort of bean), coconuts and dry chilis and that the same tax may be reduced on other foods too. This has led to lower income for the state with losses to the tune of an estimated 90 billion rupees, but it has also resulted in a big cut in consumer prices on essential products.

To counter rising prices, especially essential items, President Mahinda Rajapakse has also asked Felix Perera, Minister for Fisheries and Aquatic Resources, to take immediate steps to decrease the price levels of fish and to bring the fishing harvest of the eastern districts, including Vakarai and Trincomalee, to Colombo.

The civil war has made it difficult to keep transport channels open and this has pushed up prices in some areas. According to the mayor of Vakarai, Berty Perera, king prawns selling at 100 rupees per kilo in his area were going for 800 rupees per kilo in Ottamayadi (a mere 20km away).

On 25 June, the president met the association of traders and importers of essential food items in a bid to find a way to keep prices stable in the coming months. The government anyhow intends to fix maximum prices for certain foods, so as to rein in uncontrolled price hikes.

AsiaNews gathered the favourable feedback of several citizens. Anton Fernando, a 40-year-old father of three from Wattala zone near Colombo, expressed his “gratitude” for this initiative, which has led to a drop in prices.

Sylvia Gabriel, a teacher with two children who lives near Colombo, appreciated the intervention but added: “It is not possible to buy these goods in all food shops. The government should ensure they are sold through the shops of cooperatives, of which there is one in every village.”

The K N Goonatilake family of Negombo, which has a little baby, said it was also necessary to “intervene to contain the prices of milk and milk-related products. There should also be similar measures taken through cooperative stores.”

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• lanka
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• foods