• Truth behind decision to reduce tax on sugar-sweetened beverages – Tax revised only to benefit fruit juice producers!

    On Dec 1, Hon Mahinda Rajapaksa, under his capacity as the Finance Minister, held a discussion with business owners and representatives involved in manufacturing carbonated drinks, fruit juices and biscuits, to listen to the issues facing the industry.

    The meeting which was the first of its kind, since the new government came to power, lasted for hours with each member detailing out several issues. One of the biggest issues the industry faced was the high taxes imposed by the previous government which had led to the industry suffering in whole.


    Following the meeting, the Finance Ministry announced that sugar taxes would not be removed but would be reduced by a small margin, on a condition that the sugar levels used in these drinks are reduced significantly and more natural products are used so that consumers do not face any health hazards.

    Today, Sri Lanka’s beverage sector has directly and indirectly employed thousands of people. For example, a company like Elephant House, which is over 150 years old has provided thousands of direct and indirect jobs to people throughout the country.

    Elephant House has also been purchasing dry ginger and vanilla for their products which has set the livelihoods of thousands of families involved in manufacturing these products.

    The fruit juice industry also depends on local fruit farmers. For example a company like SMACK, purchases over 80 percent of our tomatoes and the people who depend on this industry has only grown by a significant ratio.

    But as a result of the heavy taxes imposed, by the previous government many people including the fruit manufacturers bared the brunt of it.

    The previous government justified their move by claiming that they wanted to reduce the risk of diabetes in the island, but had not done a thorough research.

    Today, sugar consumption is not only related to the beverage industry.

    When Hon. Rajapaksa discussed all these concerns with the industry members, he did what was required by him. He agreed to reduce the tax but by encouraging them to use low amounts of sugar in their products.

    He, along with Ministry experts, decided to exempt taxes for up to 6g of sugar contained per 1 liter. Anything beyond that will be taxed 30 cents per gram.

    This has encouraged industry owners to research on methods of how the content of sugar can be reduced. It has also encouraged owners to go in for more natural ingredients such as using fresh fruits in fruit drinks, rather than using artificial sweeteners, which will be a boost for our local fruit manufacturers.

    The industry has promised Hon Rajapaksa they will continue to look for alternatives to sugar and will reduce the content of sugar in their products.

    This will lead to the protection of the local fruit industry as well as the beverage industry in whole.

    These past few days certain political puppets, funded by the UNP, have misled the public by spreading false news on this decision by Hon. Rajapaksa.

    This is because the failures of the UNP are being exposed.

    We urge the citizens not to fall prey to such false news. After all we are here to serve you, to work for you and to ensure how all industries in this island can be further strengthened for the benefit of our local population.







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