Joint opposition MP Bandula Gunawardane said yesterday the government had imposed a 15 per cent VAT on imported fabric and timber from August 16 this year and urged the government to reconsider it saying it was a huge blow to the related industries.
He told parliament that the previous regime had imposed a cess of Rs.100 on a kilogram of imported fabric used as raw material in garment factories but this government in addition had imposed a 15 per cent VAT.
"This has resulted in the industrialists now having to pay more than Rs.2 million more as tax to for a container of fabric thus inconveniencing small scale entrepreneurs," the MP said.
He said the move to impose a 15 per cent VAT on imported timber would also pose a threat to forest conservation as people would be compelled to fell more trees illegally.
In the absence of the subject minister, Chief Government Whip Gayantha Karunathilake said the matter was being discussed at the government MPs group meeting. (Ajith Siriwardana and Yohan Perera)