The Local Coconut Oil Producers allege that coconut oil importers have defrauded the Government of about Rs. five billion in taxes.
Representatives of the Local Coconut Oil Producers Association (LCOPA) revealed this at a media conference held in Colombo recently.
An 18percent of VAT is levied on locally produced coconut oil, but this VAT is not levied on imported coconut oil. Therefore, the price of locally produced coconut oil is higher than the price of inferior imported coconut oil. They emphasised that this is unfair to both the local coconut oil producer and the consumer.
They revealed that the Coconut Development Board has also planned to ban the transportation of only locally produced coconut oil by bowsers. However, there is no obstacle to transporting cooking oils that come to the country under the name of imported coconut oil by bowser within the country.
The Association members added that the Coconut Development Board is not implementing such a ban on imported coconut oil, raising suspicions that it is trying to undermine the local coconut oil industry in the country.
It has been revealed in a recent discussion held by the Local Coconut Oil Producers Association with officials of the Coconut Development Board that such a ban will be imposed soon.
“People of the country use unhealthy cooking oils since it has been imported various unrefined oils into the country, refining them using chemicals and selling them as coconut oil,” Local Coconut Oil Producers Association Convener Buddhika de Silva said.
Although the Inland Revenue Department has initiated investigations to recover the tax, Silva said that the Coconut Development Authority is not providing the department with accurate data and statistics related to it.
He also said that the Consumer Affairs Authority is not conducting a proper investigation into how a kilo of cooking oil is sold, as imported coconut oil can be sold for Rs. 750 to 780 when local coconut oil producers have to spend between Rs. 1,350 and 1,400 to produce a kilo of natural coconut oil.
Buddhika also requested that several corrupt officials, in collaboration with multinational companies, are aiding and abetting tax frauds worth crores, and that action be taken against them through the Clean Sri Lanka programme, if necessary.
“Although local coconut oil is subject to a VAT of Rs. 18 and a commodity tax of Rs. 20.50. Such tax is not levied on imported coconut oil. He also stated that only imported coconut oil is exempted from the tax and that the same tax is levied on local coconut oil.
When asked about this, Coconut Development Board Chairman Shantha Ranatunga confirmed that steps will be taken in the future to ban the transportation of locally produced coconut oil by bowsers with the aim of protecting the quality of coconut oil.
“Our objective is to provide clean coconut oil to the people. There is a possibility of mixing waste with locally produced coconut oil by transporting it by bowser vehicles for sale. Therefore, we advise that locally produced coconut oil be released to the market in packages containing the name of the manufacturer and other details. Then, even if the price is slightly higher, people will be tempted to buy coconut oil containing the manufacturer’s information,” he added.
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