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 Post subject: Oxfam pays $1m tsunami aid duty
 Post Posted: Sat Jun 18, 2005 9:36 pm 
Oxfam pays $1m tsunami aid duty

British charity Oxfam has had to pay the Sri Lankan government $1m in import duty for vehicles used in tsunami reconstruction work.
Paperwork had kept the 25 four-wheel drive vehicles idle in the capital, Colombo, for a month.

The Sri Lankan government told the BBC News website the aid had been duty-free until the end of April but was now needed to prevent "market distortions".

Nearly 31,000 people died in Sri Lanka when the tsunami struck on 26 December.

Half a million were made homeless.

Bad roads

Oxfam told BBC News the 25 Indian-made Mahindra vehicles were essential in ensuring it could reach the poorest communities over rough terrain and bad roads.


A spokesman said: "Clearly Oxfam would have preferred not to pay this tax on the vehicles and we did everything we could to have the tax waived.

"However the government has turned down our request and the laws of the country dictate that we must now pay the normal import tax."

The spokesman said the incident would not affect the way Oxfam worked in Sri Lanka.

Britain's Daily Telegraph said Sri Lankan customs had charged $5,000 a day while the vehicles were processed.

Oxfam was given the choice of handing over the vehicles to the government, re-exporting them or paying the 300% import tax.

'Case-by-case'

Sri Lankan presidential spokesman, Harim Peiris, told the BBC that he could not comment on the individual case of Oxfam, but said that duties had been waived for the first four months after the tsunami.


Mr Peiris, who has a senior role in the government's tsunami relief effort, said that for the "medium-term reconstruction period" the finance ministry had decided the duty system had to be reintroduced.

He said this was in order to promote local procurement and prevent market distortions.

The Oxfam spokesman said the Indian vehicles were chosen because "Sri Lanka does not manufacture any automobiles so it was not possible to buy them locally".

Mr Peiris said duty waivers were still considered on a case-by-case basis, but that Oxfam had on this issue received an "unfavourable decision".

He said the delay was probably caused by "an evaluation and appeal process that takes time".

Some aid workers have expressed anger that reconstruction is being slowed by red tape and inefficiency.

But Mr Peiris said the government believed the relief and reconstruction programme was proceeding to "acceptable international standards".

Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/1/hi/w ... 103054.stm

---------------------------

Sri Lanka defends tsunami taxes

Sri Lanka's government has defended the $1m customs duty it charged the charity Oxfam for bringing in 25 off-road vehicles for tsunami aid work.

Finance Minister Sarath Amanagama said the rules applied to all and exceptions were not being made for charities.

A spokesman for Oxfam said it would talk to the finance ministry to try to get its money back.

Nearly 31,000 people died in Sri Lanka when the tsunami struck on 26 December. Half a million were made homeless.

Sri Lanka waived duty on tsunami relief for the first four months after the disaster but warned all organisations that the tax would then be reintroduced.

The government has said it was worried that the exemption was being abused to bring in non-essential items.

'Market distortions'

Oxfam's vehicles were kept idle in the capital, Colombo, for a month while being processed.

It said the 25 Indian-made Mahindra vehicles were essential in ensuring it could reach the poorest communities over rough terrain and bad roads.

A spokesman said: "Clearly Oxfam would have preferred not to pay this tax on the vehicles and we did everything we could to have the tax waived."

On Saturday, Oxfam's country director, David Crawford, said it would try to recover the 300% customs duty.

"We will be talking to the finance ministry and I think we have a chance of getting the money back," Mr Crawford said.

Sri Lankan presidential spokesman, Harim Peiris, told the BBC News website on Friday that for the "medium-term reconstruction period" the finance ministry had decided the duty system had to be reintroduced.

He said this was in order to promote local procurement and prevent market distortions.

The BBC's Dumeetha Luthra in Galle, southern Sri Lanka, says many aid organisations are growing frustrated at government bureaucracy and what some have privately described as greed.

But Mr Peiris said the government believed the relief and reconstruction programme was proceeding according to "acceptable international standards".


Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/2/hi/s ... 107088.stm


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