Sunday, 31 May 2020 11:37

Special Commodity Levy hike to offset tax revenue loss

The Special Commodity Levy (SCL) hike on 26 products including some food items will offset the revenue loss caused by the prohibition of non-essential imports last month. The SCL has been increased for six months with effect from May 22, the Finance Ministry said.

Import restrictions on several product categories related to exports and production of value-added and import substitution goods have been removed without however lifting the ban on vehicles.

This action has been taken as part of the interim Government’s efforts to revive the economy and reduce the COVID-19 impact, official sources said.

The total revenue from SCL is expected to increase by at least 25 per cent to Rs. 46.85 billion from the earlier estimate of Rs. 37.50 billion benefiting the upward revision of the SCL rate, provisional estimates revealed. This levy contributes to around 4.3 per cent of total tax revenue. The end result of increasing it is higher prices for consumers, rich and poor alike.

An increase in food prices during the COVID -19 crisis will hit the poorer sections of society the hardest, consumer rights association pointed out.

The SCL will be retained at a higher level on sugar and sugar substitutes, milk powder and canned fish and high taxes and will be maintained on several other items including telecom appliances, agricultural, services and construction-related vehicles. Import of raw materials for local manufacturing activities will be permitted at high tax rates.

Potatoes are allowed to be imported at a SCL of Rs.50 a kilo, sugar at Rs.50, oranges at Rs.125, lemon at Rs.350, grapes at Rs.200, apples at Rs.100, dates at Rs.100, cumin seeds at Rs.162 and maize at Rs.25. However several essential food items are being allowed to be imported at somewhat low but increased SCL rates.

Peas are taxed at Rs.5 a kilo, split peas at Rs.10, split red dhal and yellow dhal at Rs.10 and whole seeds at Rs.5.

The SCL on yoghurt is at Rs.800 a kilo and margarine at Rs.650 a kilo.

(LIN)

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