The Hon. Wasantha Samarasinghe - Minister of Trade, Commerce, Food Security and Cooperative Development

¶ 01 Hon. Presiding Member, I wish to respond to a point raised by Hon. Kader Masthan. Our Government protects the education rights of all children — Sinhala, Tamil, Muslim, Burgher, Malay — without discrimination. There is no policy of neglecting minorities. Where any injustice occurs or the right to education is impeded, we will respond. In private schools we must follow set procedures, but the first Budget has allocated sufficient funds to address public education needs, and we will continue to safeguard children’s education.

¶ 02 Regarding the claim that a youth was arrested under the PTA for pasting a sticker, some are trying to create a wrong impression. Terrorism and extremism have been defeated; the Government is responsible for public safety. Please meet not only the youth but also his parents to understand what exactly happened. Recall the Easter Sunday attacks: the foot-soldiers died, but the masterminds hid. We will prevent such mediation attempts from recurring and ensure safety for citizens and tourists. When a sticker is pasted in front of a hotel, we must take steps to prevent an escalation. The Minister of Public Security has also clarified: no law, including the Prevention of Terrorism Act, will be used to oppress the public.

¶ 03 Now, to the VAT (Amendment) Bill. The Opposition raised points, but we have implemented good tax reforms and corrected excesses. By cutting VAT on dairy-based products like yoghurt, we have eased access for children and families.

¶ 04 This Bill also interfaces with other tax amendments — to the Inland Revenue Act, personal income tax rates and slabs, and corporate tax adjustments. Some attempt to mislead society on these. For the U.S. tariff changes, we must protect our economy, industry and producers. We must also lay the foundation — the strong base — to move forward. In the past there were VAT leakages that supported fraudsters.

¶ 05 Take SVAT abuse: in some sectors, importers brought steel as “raw material” under SVAT, paid no VAT, took the green form, but never exported; instead, they sold domestically, gaining an 18% illicit margin over local VAT-paying producers. We are fixing this. If you export, you can take inputs under SVAT and export — no issue. But not to sell domestically.

¶ 06 Our foreign ministry has already engaged the U.S. on tariff matters. The Finance Minister Dr. Harshana Suriyapperuma, Dr. Anil Jayantha and Secretaries have discussed with stakeholders to seek revisions. Meanwhile, we are easing burdens on industry: we reduced electricity tariffs; and now, costs for worker transport and meals provided by factories will be VAT-exempt, giving further relief to producers so they can compete globally.

¶ 07 On VAT and eggs: VAT registration applies only if monthly turnover exceeds Rs. 5 million (about Rs. 160,000-165,000 per day). A small farmer selling under that, with say fewer than 6,000 layers, is exempt. Annual threshold is Rs. 60 million for filing. So using VAT to hike egg prices by Rs. 10-15 is unjustified. The real issue is feed costs. We are importing 300,000 MT of maize to reduce feed prices while protecting local farmers. Prices rose during the festive season; do not exploit consumers. We will protect the industry and provide inputs.