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Special Commodity Levy: Hospitality sector resigned to levy hikes

19 Mar 2022

By Maneesha Dullewe The Finance Ministry’s imposition of a special commodity levy on nine imports for the next six months is likely to exacerbate the downward economic trend of an already hard-hit hospitality sector, stakeholders warn. A circular dated 9 March lists imported items – including yoghurt, butter, dairy spreads, and grated or powdered cheese, in addition to several fruits, including dates, grapes, apples, and oranges – of which prices are expected to increase under the Special Commodity Levy Act. However, stakeholders caution that these steps could inflict further pain on the sector.  All-Ceylon Bakery Owners’ Association (ACBOA) Chairperson N.K. Jayawardene said: “Under the circumstances, it’s good that they did it, but it will have a huge impact on the bakery industry. However, we can’t really say or do anything about this given the prevailing crisis.” He added that prices would rise since they were on a continuous upward trajectory at present. “The levy will affect the industry, causing costs to go up,” said Colombo City Restaurant Collective (CCRC) President Harpo Gooneratne, warning that this would have long-term repercussions. He noted that prices of all items required by restaurants would shoot up, since the rupee would also devalue. Overall, industry representatives remain resigned to the new import levies, citing unstable economic conditions. “Obviously we are concerned because of the price escalation, but we have no choice. We have to use our local produce as a work around to keep our heads above water. From Covid-19 to the Easter Sunday attacks to this, it has been extremely difficult,” said Gooneratne. Speaking to The Sunday Morning, The Hotels Association of Sri Lanka (THASL) President M. Shanthikumar echoed the sentiments of his industry counterparts, noting: “The costs will definitely go up and hotels will have to do price revisions. There’s no other option.”  

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