State coffers deprived of Rs. 1 Bn in VAT, due to excessive imports before Jan 1

Due to the imports made by the unscrupulous businessmen in the last two weeks of December last year with the aim of making excessive profits before the imposition of the Value Added Tax (VAT) from January 1, the Government has lost state revenue of Rs one billion (One thousand million rupees), Finance State Minister Ranjith Siyambalapitiya revealed.

“The Government has lost state revenue of one billion rupees due to the imports made by fraudulent businessmen in the last two weeks of December last year with the aim of getting excessive profits,” he said.

A surge in imports in any year is seen before festive seasons and at times of urgent need. But even though the Government had decided to increase the VAT from January 1, before that date, certain businessmen had taken measures to import 28 types of goods unnecessarily aiming to earn excessive and unfair profits.

State Minister Siyambalapitiya revealed this at a press conference yesterday (8) at the Presidential Media Centre.

According to the amendments made by the Government to the VAT, (1) the VAT is now charged for certain goods that were not listed for VAT, (2) the VAT was raised from 15 percent to 18 percent for certain goods, and (3) the VAT registered turnover limit was reduced from Rs. 80 million to Rs. 60 million from January 1.

In the first two weeks of December of any year, the amount of goods imported into this country is very high. An even higher quantity of goods was brought into the country in the last two weeks of December. Citing Customs reports, the State Minister pointed out that the increase is 300 to 500 percent higher than the requirement of certain goods.

Due to this, heavy congestion was reported during the last two weeks of December in obtaining the services of the Colombo Port and the Customs Department, the State Minister said.

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