Opposition MP and Committee on Public Finance Chairman Dr. Harsha de Silva has warned that the government’s proposed duty on coconut oil imports could collapse Sri Lanka’s coconut export industry, reduce foreign exchange earnings and damage farmers and workers.
In a post on X on Saturday, the SJB economic spokesperson said the proposed duty would push import costs to between Rs. 1,250 and Rs. 1,400 a kilogram, shifting local coconut production away from value-added exports toward domestic oil production, collapsing farmgate prices, killing existing export contracts and ironically generating zero duty revenue because imports would stop altogether.
The decision could result in lower export earnings, reduced government revenue and place the industry under severe pressure by the third and fourth quarters of 2026, Dr. de Silva said. He added that he had raised the issue at the COPF, the parliamentary watchdog he chairs.
“This government needs to think carefully. Bad tax policy doesn’t just hurt industry, it hurts the farmers and workers behind it,” Dr. de Silva said.
The warning comes a day after Agriculture and Plantation Industries Minister Samantha Vidyaratna opened emergency discussions with the Ministry of Finance to set a coconut floor price to protect farmers from falling global prices. Sri Lanka’s coconut industry — recently brought under the Agriculture and Allied Industries Insurance Board’s new crop insurance scheme covering cinnamon, rubber, tea and coconut — is one of the country’s most exposed export sectors, with a stated 4,200 million-nut target by 2030 and US$1.5 billion in annual export earnings.
The COPF Chairman’s intervention positions the parliamentary watchdog against a measure that has not yet been formally gazetted but appears already on the Finance Ministry’s drafting table. Dr. de Silva did not say whether the COPF will issue a formal recommendation against the duty.
Source: Harsha warns coconut export industry at risk from coconut oil tax — Newswire, June 20.
