Sri Lanka cuts taxes on milk powder

independentlk · 1 Sri Lanka cuts taxes on milk powder Tue Jan 25, 2011 4:31 pm

independentlk

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Sri Lanka has cut taxes on imported milk powder from 50 rupees a kilogram to 28 rupees as global commodity prices surged, a finance ministry official said soon after taxes on petrol were cut to maintain prices.
S R Attygalle a senior Treasury official said Sri Lanka imported about 3,000 tonnes of milk powder and the state will lose about 500 million rupees in tax revenues a month from the move.

A day earlier, Titus Jayewardene, secretary of the petroleum ministry said import taxes on petrol were cut by 10 rupees to 5 to stem losses in state run Ceylon Petroleum Corporation and listed Lanka IOC distributors.

The distributors sell fuel and government dictated prices.

Sri Lanka raised taxes on many imported commodities after a commodity bubble collapsed in 2008 in the wake of a bursts credit bubble in the United States.

But the Federal Reserve has been printing money heavily since then and the banking system has strengthened since then giving potency to monetary policy again and weakening the value of the US dollar against commodities.
Food commodities, base metals, minerals and precious metals have started to bubble again. Sri Lanka is pegged to the US dollar and its prices are directly anchored to the US dollars unlike a country with an independently floating currency.

Monster · 2 Re: Sri Lanka cuts taxes on milk powder Tue Jan 25, 2011 5:04 pm

Monster

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This may be the reason we have seen a price movement on LMF these days. Some big investors were collecting this share.

Analytic · 3 Re: Sri Lanka cuts taxes on milk powder Wed Jan 26, 2011 11:32 am

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The Sri Lankan government announced today that it has reduced the import levy on infant milk powder by Rs. 22 per kilogram.

The General Treasury has reduced the import duty on one kilogram of milk powder from existing Rs. 50 to Rs. 28, a government statement said.

The decision to reduce import tax is expected to help importers to maintain market stability and the current prices with no change.

Sri Lanka depends on imports to fulfill its dairy requirement as the country only produces 35 percent of its need.

The government, in a move to boost the country's dairy production, has recently removed all import levies on breeding dairy animals and related equipment needed for the industry.

The government says that the country needs additional 100,000 high yielding cows to achieve self sufficiency in milk production by 2016.