VATquote s The Reason – Updated

Deputy Finance Minister Bandula Gunawardana says the government sector initiative to reduce prices to reflect the zero duty on essential items is intended to set an example for the private sector to follow suite. rn

rnMost state institutions that benefit from the zero duty will in effect absorb the 6.5 per cent National Security Levy (NSL) already paid for stock acquired before August 1. rn

rnMost of these products were exempt from the 12.5 Goods and Services Tax, paying only the NSL. rn

rnUnfortunately, the good deed will burden the state institutions with over Rs. 900 millions in losses. rn

rnOne such identified entity, the State Pharmaceutical Corporation will write off Rs. 20 million when it reduces the prices of products in August.rn

rnThe Cooperative Wholesale Establishment is also expected to count its losses from its massive stock. rn

rnMinistry officials outlining notable losses included Rs. 119 mn from spices, Rs. 250 mn from meat products and Rs. 292 mn from pharmaceuticals. rn