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| Sunday, 4 August 2002 |
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VAT: People voice varied opinion by Shanika Sriyananda Liyanage, Don Asoka Wijewardena and Deepal Warnakulasuriya In the wake of the "Value Added Tax" (VAT) coming into effect from August 1, the prices of essential items such as vegetables, fruits, rice, infant milk, fish and pharmaceuticals that have been exempted from VAT, have already come down. The abolition of Good and Services Tax (GST) and the National Security Levy (NSL) has been hailed by the general public and great majority of businessmen.In order to ensure price reduction of essential commodities, the "Sunday Observer" conducted a market survey at the main markets in Borella, Bambalapitiya and Pettah and interviewed a number of green-grocers, fish vendors, retailers and consumers on the impact of the VAT. I.S. Jayantha, a grocer at the Borella market,told us that there had been a significant price reduction of almost all vegetables since the VAT became operative. "During the past few years I was unable to make both ends meet due to high prices at wholesale centres. Earlier one Kg of beetroot was between Rs. 60-80 but now Rs 30,leeks was Rs 100 and now Rs 40. One Kg of carrots was Rs 100 now down to Rs 60 with raddish Rs 50-60 now at Rs 20.I must say that people have complete confidence in the government," said Jayantha. C. Karunawathi, a housewife in Borella said that people were not pleased with the state of affairs during the previous regime where they had to purchase essential items at exorbitant prices. "My husband died a few years ago and I have children to look after. I sell lunch packets to sustain a living. Hereafter, I will be able to sell more packets because vegetables are cheaper." she said. T. P. Abeyawickrema, a grocer at the Bambalapitiya market made some positive comments on the VAT. He said that most wholesalers were dominating the vegetable market and wholesale prices were very high. "There were occasions where I could not sell the entire stock of vegetables due to high prices. In comparison there is a remarkable price reduction," he said. M. Ratnasiri, a consumer at the Bambalapitiya market was not aware of the introduction of VAT and was pessimistic over price reduction. "Everything is expensive today. The government says that the VAT has exempted a number of consumer items including pharmaceuticals but when we try to buy them, there is an upward trend of prices. I will be glad to see the price reduction soon because at the moment prices remain exactly the same," Ratnesiri said. K. D. Sirisena, a retired teacher told us that people should budget their earnings to suit their lifestyles. He emphasised the need for keeping abreast of the things at all times by utilising both print and electronic media. "Some do not know anything about the GST,NSL and the current VAT system and they never see the things in their perspectives.Some scatte accusations against the government without realising the benefits of the VAT will bring down the cost of living.In my view we must get rid of parochial views and thank the government for its progressive steps ,which is on the threshold of a development program," Sirisena said. An accountant at a leading telecommunications company commenting on the VAT speaking over the VAT said that the same coin has been flopped over after sometime which had only created new burdens. "The previous government introduced GST (Goods and Service Tax) attributing the same reasons. Streamlining, simplification, eliminating, cascading effect of tax system and increasing the revenues were the reasons given by them and the very same was given this time too," he added. A proprietor at a leading chemical importing and distributing firm said that the government's need to introduce the new system was not clear. They were not given enough time to study the system thus preventing some businessmen from implanting it last two three days. Sarath Muthukumarana, a clerical officer at a ministry said that prices of vegetables and some other essential items have come down. "But, it is very difficult to be positive or negative with the new tax system since we know very little about it. Sometimes, it is not clear what the media says. Some are positive while some are negative. How could that be so? he asked. Miss Consy Nanayakkara, employed at a private firm said that they were still struggling with the system how to adjust it. "However, my mother says all items have come down which is a very good thing. But, my boss sees it as another trick," she said. She further said that marking the prices of their products has become a problem to them, since VAT comes in three categories, zero tax, 10 and 20 per cent. Eranga Jayasinghe: A young mother of a two year old daughter from Udahamulla, said that she was happy with the new tax system. " Now there is no tax for baby milk powder. Really it is a big relief for us. I do not know whether this tax relief will apply to other baby food items as well. If so, it will be a great relief to parents who have little children. Because these days majority of parents have to spent half of their monthly pay packet to buy things for children", she said. "There is no tax for necessary food items and prices of vegetables will also come down. It is a relief", she added. Swarna Peiris: A mother of three young children from Nugegoda wants the government to educate the vendors on the VAT. " It is a relief for the ordinary man as prices of many items will come down. But, the vendors are still not aware of it and they keep selling items at the same price", she said. "When the price of diesel goes up the traders automatically raise the prices up. But, when the price come down they must do the same. But, still the prices are the same even", she complained. A father of three, Gamini Premathilake from Delkanda said: There are both, bright and darker sides of the VAT. Anyhow, there will be a relief for us, the ordinary people. J. M. Chandradasa, a father of four and a heart patient from Piliyandala said: It will be an immense benefit if this system is applies to the milk powder and vitamins given to patients. On the other hand we must thank the government for bringing down the prices of most of the drug items", he said. Nisansala Fonseka, an Advanced Level student wants the government to raise the tax on cigarettes and alcohol. "If the government can do that, healthwise it will be good for all", she pointed out. |
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