The Government in its efforts to encourage the local paddy farmers while discouraging the heavy consumption of wheat flour is looking at the possibilities of revising the tax structure on wheat flour and wheat grain imports.

Secretary of the Ministry of Finance and Planning Dr. P.B. Jayasundara yesterday disclosed this at a meeting of the District Secretaries discussing the progress made on the imprest releases for paddy purchases this year.

"We need to uplift the local paddy farmers. In doing so the consumption of wheat flour should be discouraged. Having this in mind we are looking at revising the tax structure imposed on all wheat and wheat grain imports to Sri Lanka. With this process we will be a self sufficient nation in few years," The Treasury Chief said.

Currently Sri Lanka imports US $ 100 million worth of wheat flour annually with a 15 per cent import levy. A 6 per cent import duty is levied on wheat grain.

Deputy Minister of Finance Ranjith Siyambalapitiya who was present at the meeting said that Government is taking all possible efforts to uplift the local paddy industry. "We have 15,000 Farmer Associations backed by 545 Govi Kendra.

During the first few months of this year government has disbursed Rs. 2,532 million followed by another Rs. 75 million to purchase paddy in Polonnaruwa, Anuradhapura, Ampara, Badulla, Trincomalee, Kurunegala, Puttlam, Hambantota, Monaragala, Batticaloa, Kandy Ratnapura, Mannar, Vavuniya, Mulaitivu, Kilinochchi, Matale Districts."

According to Central Bank statistics the paddy output in 2004/05 Maha season increased by 20.5 per cent to 2 million metric tones., while the output in Yala 2005 season also increased by 28.7 per cent to 1.23 million metric tones, raising annual output by 23.5 per cent to a record 3.25 million metric tones in the clast year.