National Federation Party Leader, Professor Biman Prasad says the reduction and elimination of duty on 1,600 items will not have a positive impact on the livelihood of the ordinary workers and citizens and the many thousands of workers who have lost their jobs.
Prasad says basic food items like rice, flour, tea, garlic and onions as well medicine was already duty-free but people will still have the burden of paying 9% VAT on them.
He says while the list of 1,600 items also have food items, an overwhelming majority of them are luxury foods.
Prasad says at the same time the 32% duty on milk and butter have not been reduced.
He says this means people still are being forced to pay 41% in taxes in the form of 32% duty plus 9% VAT.
The NFP Leader says one wonders if this is to do with the long-term protection given to a local company.
He says edible oil still carries a 15% duty with concessions available to retailers, and lentils or dhal, another basic food item still carries a duty of 5%.
Prasad says the prudent measure to cushion the impact of high cost of living to the ordinary workers and citizens and the unemployed would have been to remove VAT on basic food items and prescription medicine.
He says in normal economic times, reduction in duty on such a large range of imported goods would have led to an increase in consumption.
Prasad says right now people are worried about putting food on the table for their families. He says this is their priority, not to use their hard-earned money to purchase white goods and luxury items in abundance.
The NFP Leader says the government’s expectation that this reduction would raise consumption demand and increase VAT revenue may be misplaced and unrealistic.
