Chaos at Department of Trade and Investment Policies over Potato & Onion Tax Dispute

⭕ Director General of Trade and Investment Policies, Pradeep Kumara, resigned after refusing to implement a tax order on onions and potatoes without Cabinet approval.

⭕ The Finance Ministry Secretary had reportedly instructed the imposition of taxes before Cabinet clearance was granted.

⭕ Kumara reportedly informed the Secretary that publishing the tax gazette without legal backing was unlawful and reportedly resigned under repeated pressure.

⭕ However, from August 26, the government raised the special commodity levy on imported potatoes from Rs 60 to Rs 80 per kg, and on big (Bombay) onions from Rs 10 to Rs 50 per kg (effective for three months).

⭕ The Department of Trade and Investment Policies is responsible for tariff changes and trade-related policy decisions. It has the authority to alter duty structures that impact billions in revenue and can facilitate major trade reforms with the stroke of a pen, bypassing bureaucracy.

⭕ The general public is mostly unaware of the department’s existence, yet its actions or inactions are behind many of the country’s recurring trade issues: vehicle import tax decisions, tariff inconsistencies, the 🇨🇳 BYD case, and problems with 🇱🇰 Sri Lanka’s e-commerce framework.

⭕ Last month, TIP was in the spotlight during the e-commerce tax issue (Temu & AliExpress). Just like many other policy issues, it went into limbo under this department’s jurisdiction. https://x.com/numberslka/status/1945341778686828928

⭕ With proper leadership, stakeholder engagement, and a capable staff executing sound policy, the department could singlehandedly fix many of the trade challenges the country faces.

⭕ Hope the government recognizes this and initiates necessary reforms.

#SriLanka #TaxIssues