Tax hike on milk powder imports on the cards

The government is considering a further tax increase on milk powder imports from the present 15 per cent or Rs. 92 per kilo gram to discourage milk powder imports and promote local liquid milk, officials said.

Sri Lanka imports 84,000 metric tons of milk powder annually spending Rs.36 billion in foreign exchange.
This drain on valuable foreign exchange has prompted the government to consider a further revision of the import duty on milk powder, they disclosed.

The demand for liquid milk in the country is insufficient as people are used to buy milk powder due to its low price and convenience, officials pointed out.

Production of local liquid milk has increased up to 1.6million litres per day due to the increase of certified purchase price for a litre of local liquid milk up to Rs.50 and other incentives, they added.

But the consumption of fresh milk has been unduly overshadowed by the influence of the imported milk powder propaganda campaign, officials alleged.

The government is also looking at the possibility of regulating branded milk powder advertisements so that liquid milk gets adequate air time, officials said.

The modalities are yet to be worked, but there will not be a curtailment or ban on such advertisements.
“There are no restrictions as such but there will be promotions for fresh liquid milk in the market highlighting the aspect of how safe are imported milk powders and other dairy products,” they said.