‘Cess tax increase on sugar does not affect retail price’

The cess tax increase on sugar does not affect the retail price of sugar, Development Finance Department Director General Priyanka Attapattu said yesterday.

Attapattu addressing the media at the Government Information Department said the recent increase in the cess tax from Rs. 13 to Rs. 23 per kilo of sugar, though added an extra Rs. 10 to the price, it was absorbed by the decrease in world prices from Rs. 89 to Rs. 69 in recent times. The Rs. 10 increase would still be a decrease in overall retail prices, he said.

“The government increased the tax to help local farmers compete with the decrease in world sugar prices. Only 8 percent of the demand is met by local farmers,” he said.

According to the Director General, in 2016, the cess tax was at 25 cents per kilo of sugar, in October 2016, it was increased by Rs. 2 per kilo, in December, it was again increased by Rs. 7 and finally to Rs. 23 per kilo “The 2017 Budget promised to pay a minimum of Rs. 4,500 per metric ton of sugar cane. This tax is an insurance to local farmers,” Attapattu said.

He said world sugar prices will continue to drop in the future.

Sugar Importers Association President P.M. Abeysekara said there is no need for retailers and bakery owners to increase sugar prices as the price increase has not been passed on to wholesalers. 

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