I refer to the news report under the caption " Fiscal policy gives outdated ‘VAT’ list to Customs" that appeared on the Business and Economy section of The Island of Wednesday.

In this news report, it is said that the exemption and the value added tax (VAT) list handed over to Customs by the Fiscal Policy Department (FPD) is outdated. This is completely false and misleading.

A meeting was held in the Department of Fiscal Policy and Economic Affairs on Tuesday to discuss the forthcoming VAT. At this meeting which was attended by the officials of Treasury, Customs and Inland Revenue, the officials of the Fiscal Policy Department tabled two sets of provisional documents which are two lists of items indicating the rates of VAT. These two sets of documents had been prepared by the Fiscal Policy Division as guidelines for the Customs to improve on and prepare two complete lists of items for VAT according to the classification of harmonized system (2002 edition). It is therefore clear that the Fiscal Policy Division had not handed over any out dated VAT list to Customs.

Further, it is mentioned in the penultimate paragraph of this report that the method that would be used to calculate VAT at the point of import, would be the same as that which is being adopted in the calculation of the existing goods and services tax (GST). I would like to mention here that the method of calculation of VAT was not discussed at this meeting.

R. U. Gooneratne

Director of Customs (Policy, Planning & Research), for Director General of Customs

Business editor’s note: We stand by on story. Will Mr. Gooneratne explain as to why the FPD in the first place did not prepare their provisional lists based on the Harmonized System (2002 edition)?.

Could he explain, what was the basis used to prepare the provisional lists? Gooneratne is a public officer paid by tax payers’ monies. Therefore, on the grounds of transparency, he should state how the provisional lists were prepared, or, otherwise, explain as to why he is unable to disclose such information to the public.

Further, as a part of his stewardship as a public servant, he should make the provisional lists a public document, thereby, probably averting a crisis, similar to that which has arisen after the imposition of the new import levy of 0.75%.