Friday, March 1, 2024
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Palm oil racket re-enthroned due to new coconut oil tax

Colombo (LNW): The swindle of selling palm oil-mixed coconut oil has once again been enthroned after months of silence due to the recent tax imposition on coconut oil, leading to a loss of about US $ 700 million in exports, lamented the National Movement to Protect Consumer Rights, a leading consumer rights watcher in Sri Lanka which previously divulged the ongoing racket of selling palm oil-mixed coconut oil in the local market.

The disclosure appears in the backdrop where the Finance Ministry has imposed a tax of Rs. 25 per litre on imported coconut oil, and the move is easily paving the way for notorious cooking oil dealers to continue the swindle of selling palm oil-mixed coconut oil whilst the market price of coconut oil soars, said the movement’s Chairman Ranjith Vithanage.

This will also be catering to the decline of export revenue from the coconut-related products in Sri Lanka, he noted.

“The annual coconut requirement was estimated to be 4.9 billion fruits, as per the statistics of the Coconut Development Authority in 2019. The number of coconuts required for domestic consumption is 1.8 billion fruits and the number of coconuts needed to produce coconut oil in this country is 1.8 billion fruits. The number of coconuts required for export-related production is 1.3 billion fruits. But the annual coconut harvest is 3.1 billion fruits. Based on the stats, the annual coconut deficit is 1.8 billion fruits,” Vithanage emphasised.

He went on: “Various methods had been used to cover this deficit. One is to import coconut oil to Sri Lanka. Between 140,000 – 160,000 metric tonnes of edible coconut oil has been imported into Sri Lanka in 2019. If that amount was produced in Sri Lanka, the amount of coconuts used for it would be equal to 1.4 – 1.6 billion fruits. If the import of coconuts is stopped due to the rise in the import tax on the price of coconut oil, 1.4 – 1.6 billion coconuts may have to be spent to meet the coconut oil demand of Sri Lankan consumers. The drop of export-related products due to the availability of coconuts, the annual decline in export revenue mounted to US $700 million.

Every time the amount of duty imposed on coconut oil surged and the amount of duty imposed on palm oil dropped, the swindle of selling palm oil-mixed coconut oil was undertaken by notorious businessmen. For the past twenty-five years, that smuggling has been going on, and to stop that smuggling, the government had increased the amount of duty on palm oil and even tried to maintain the amount of duty imposed on coconut oil at a lower value than the amount of duty imposed on palm oil. As a result, the swindle of selling palm oil-mixed coconut oil came to a standstill.

These smugglers appear in various forms from time to time and try to impose a lower value for palm oil than the duty imposed on coconut oil. This time, the amount of duty imposed on coconut oil was increased by Rs. 25 as a result of that effort.

A government should be looking into every aspect whilst imposing taxes. The economy of the country as well as the health of the people of the country are seriously threatened due to taking decisions based on only one end. The export revenue is also falling.

Our organisation, therefore, urge the responsible units to reconsider the Rs. 25 duty imposed on coconut oil. Or else, please increase the duty imposed on palm oil by Rs. 25 as well.”

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