Sri Lanka's Committee on Public Finance (COPF) has approved a government proposal to raise the Special Commodity Levy (SCL) on imported big onions and potatoes to support domestic producers during the 2025 Yala season.
At a meeting chaired by MP Harsha de Silva on October 21, the committee endorsed the increase of the SCL on imported big onions by Rs. 10 (US$0.03), from Rs. 40 (US$0.13) to Rs. 50 (US$0.16) per kilogram, and on imported potatoes by Rs. 20 (US$0.06), from Rs. 60 (US$0.20) to Rs. 80 (US$0.26) per kilogram. The new rates came into effect on August 26, 2025.
While the SCL had been scheduled for gradual removal, the committee noted that the levy remains a useful mechanism for protecting local farmers, despite the risk of misuse.
The COPF instructed the Ministry of Trade and the Ministry of Finance to align tariff structures with the National Tariff Policy to ensure greater transparency and predictability. It also directed the ministries to evaluate the impact of future tariff reforms, including a shift to a four-band import duty and the planned phase-out of para-tariffs such as SCL and CESS between 2027 and 2030. The ministries are expected to submit an update on these changes by March 2026.
To enhance domestic production, the COPF recommended that the Department of Agriculture introduce high-yield cultivation kits for big onions, aiming for national coverage within five years. It also advised including improved storage and market-stabilizing systems, such as humidity and temperature-controlled warehouses, buy-back agreements, and futures contracts to reduce post-harvest losses and stabilize farmer incomes.
During the session, the committee also reviewed and approved amendments to the Excise Ordinance (Chapter 52) governing liquor production. The new rules stipulate that producers who fail to pay excise duties within 30 days will have their operations suspended, and sales or distribution will be banned after 90 days. These changes are intended to address weaknesses in the existing system, which previously relied on a 3% interest penalty for late payments.
Deputy Ministers Chathuranga Abeysinghe, Nishantha Jayaweera, and Arkam Ilyas, along with MPs Rauff Hakeem, Harshana Rajakaruna, Nimal Palihena, Chithral Fernando, Wijesiri Basnayake, Thilina Samarakoon, Champika Hettiarachchi, and Lakmali Hemachandra, attended the meeting.
Officials from the Ministry of Trade, Commerce, Food Security, and Co-operative Development, including Secretary K.A. Vimalenthirarajah, and representatives from the Department of Trade and Investment Policy and the Excise Department, were also present.
Source: NewsWire
