Sri Lanka ‘social market economy’ to expropriate private sugar after midnight tax debacle

ECONOMYNEXT – Sri Lanka’s state will expropriate sugar stocks imported by private traders before a 50 rupee a kilogram midnight tax was slapped, Trade Minister Nalin Fernando has said as more dramatic state interventions follow the controversial tax hike.

Under Sri Lanka’s so-called Special Commodity Levy law, taxes can be raised by the executive while the population is sleeping to be rubber stamped by a parliament.

After hiking taxes by 50 rupees a kilogram, price controls were slapped for a month in the first episode of state interventions.

“Today the cabinet decided to expropriate stocks imported for 25 cents are kilogram and issue them to Lanka Sathosa, Supermarkets and selected Co-operatives to be sold at 275 rupees,” Trade Minister Nalin Fernando said in the latest in a series of state interventions following the midnight tax drama.

Sri Lanka is supposedly operating a social market economy (Soziale Marktwirtschaft) which helped create an economic miracle in post-World War II but the sugar interventions are more in line with the earlier forced economy (Zwangswirtschaft) that it replaced, analysts say.

State Miniter for Finance Ranjith Siyambalapitiya said 19,000 metric tonnes of sugar imported before the tax, remained in the country until last week.

Minister Fernando said after the expropriation, a price control on sugar will be removed.

Sr Lanka’s ruling party came under corruption allegations after midnight tax was slapped, on top of an earlier tax on wheat.

The International Monetary Fund in a corruption diagnostic report also faulted midnight taxes.

ECONOMYNEXT – Sri Lanka’s state will expropriate sugar stocks imported by private traders before a 50 rupee a kilogram midnight tax was slapped, Trade Minister…

ECONOMYNEXT – Sri Lanka’s state will expropriate sugar stocks imported by private traders before a 50 rupee a kilogram midnight tax was slapped, Trade Minister…