Feb 20, 2015 (LBO) –The new government had to revisit the ‘deemed Value Added Tax’ where it was asked by the new administration to pay tax on ‘VAT-exempt’ items such as vegetables, seafood and rice by limiting the ability of companies to reclaim taxes, Sri Lanka’s Cargills Food City Chief Ranjith Page said in Colombo recently.
“If we are to contribute towards the development of agriculture and the rural sector and create sustainable jobs they will have to re-visit some of these VAT impacts towards the organized trade,” he said.
“We are not expecting immediate answers, we believe that the State needs to re-visit this as soon as possible because it has an impact on the cost of living, an impact on the rural communities and the livelihoods of thousands of farmer families.”
Retail is one of the tax sources of the government.
Sri Lanka has only 16 percent of organized retail trade, which was built in almost 30 years.
Page said the firm is engaging with the govenment about the deemed VAT.
“I think VAT on non VAT liable products like basic agriculture, dairy and pharmaceutical needs to be revisited because we can’t drain the VAT neither you can pass the VAT,” Page said.
“It has a large impact to the community from agricultural farmer or the producer to the consumer. I’m talking about small people not corporates,”
“Government needs to look at it.”