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Finance Ministry’s drastic import tax cut on maize incurs heavy revenue loss

By: Staff Writer

Colombo (LNW): The Finance Ministry’s drastic import tax cut on maize aimed at lowering the cost of animal feed produced with maize has opened doors for a few importing companies to fish in troubled waters , commodity importers complained.

About 200,000 metric tons of maize is imported annually without taking into consideration the amount of maize grown and harvested in the country.

Concerns are raised regarding a potential loss that the government will make to the tune of Rs50 per kilogram when importing maize from Pakistan.

10,000 metric tons of maize has been allocated to the National Food Promotion Board, official sources said.

The government’s decision to reduce the import tax on maize is aimed at lowering the cost of animal feed produced with maize.

State Minister for Finance Ranjith Siyambalapitiya stated in August that the government had reduced the import tax on a kilogram of maize by 50 rupees.

The previous import duty for a kilogram of maize was 75 rupees. Consequently, the import duty on a kilogram of maize has now been lowered to 25 rupees.

The government’s decision to reduce the import tax on maize is aimed at lowering the cost of animal feed produced with maize.

However, it has been reported that some companies are attempting to capitalise on the tax concessions provided for maize imports to Sri Lanka; which would then potentially generate substantial profits.

Consequently, there seems to be plans to distribute the tender for maize importation among multiple companies, without granting the tender to those companies that have been importing maize so far.

These plans are driven by expectations of earning higher profits.

Meanwhile, the Ministry of Agriculture recently made a decision to impose and subsequently lift a ban on maize imports.

The Department of Animal Production & Health in Peradeniya (Central Province) decided to import maize due to a shortage of two hundred thousand metric tons.

The Department of Animal Production and Health (DAPH) planned to distribute the imported maize; allocating 70 percent to companies that utilise maize in their production and the remaining 30 percent to companies importing it for animal feed.

Consequently, companies involved in various products using maize have already commenced importing 70 percent of the designated quantity.

The National Food Promotion Board was tasked with importing 10 percent of the remaining 30 percent of maize.

Initially, the Ministry of Agriculture had planned and granted permission to allocate the remaining 20 percent to other exporters.

However, without providing any explanation, the Ministry halted the import of maize stocks that had been allowed for these exporters.

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