• Decision made to keep food prices in check
• Applied only for selected commodities

The Government has no plans to remove the Special Commodity Levy (SCL) as proposed by the previous regime due to the need to keep food prices in the market in check, according to the Department of Trade and Investment Policies.

Speaking to The Sunday Morning Business, the department’s Director General I.J. Abeyratne noted that a decision had been made under the previous regime to remove the application of the SCL. However, that decision was revoked by the incumbent Government.

She further stated: “Right now there is no decision to remove the SCL, because it is necessary to keep the food prices in balance. That is the Government’s stance, so for the time being, there is no such decision.”

During the previous regime, the Cabinet of Ministers on 25 March 2024 approved a proposal submitted by then President Ranil Wickremesinghe to repeal the SCL Act No.48 of 2007, where provisions have been made for the importation of 64 goods, including essential food items, under the SCL executed as a single composite levy, with effect from 1 January 2025.

Abeyratne further stated that although imposing the Special Commodity Levy was convenient from a tax administration perspective, they were keeping their reliance on it at a minimum, in line with international trade norms and practices and its status as a special tax, applying it only to certain food items.

“It is applied only for selected commodities, where there is a need to protect farmers and to control prices,” she stated.

Following the change in government, the new Cabinet of Ministers, in its decision dated 18 December 2024, decided not to give effect to the previous Cabinet’s decision.

That decision was justified on the basis that “it has been observed that it is appropriate to further continue with the Special Commodity Levy Act No.48 of 2007, taking into account the likely enforcement of other taxes including Value-Added Tax with the repealing of the said act, on the goods on which the Special Commodity Levy was applicable and the consequent increase of market price of essential goods, and the likely adverse impact on the government policy on facilitating the local farmers”.