Government has increased the Special Goods Tax on imported potatoesup to Rs.40 from Rs.35 per kilogram as effective from midnight yesterday (August 24) with the intention of safeguarding the local potato farmers.
The domestic harvest has started reaching the market and this decision has been taken subsequent to the constant request by local potato farmers to provide them a better price.
The annual consumption of potatoes in Sri Lanka is about 180,000 metric tonsand 70% of the requirement is imported. Nearly Rs. 4,800 million is spent annually by the government to import potatoes.
The increase in tax on imported potatoes has been introduced to save this huge sum of foreign exchange while encouraging the local farmers who provide the balance 30% produce to the market.This also expects to fetch a higher price for local potatoes and increase the productivity in potato cultivation.
However, the increase in special goods tax on potato will not affect the consumer as a maximum price control is currently effective on potatoes.