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Last Updated: Saturday, 18 June, 2005, 14:42 GMT 15:42 UK
Sri Lanka defends tsunami taxes
Oxfam aid bound for Sri Lanka
Oxfam's vehicles were kept idle in Colombo for a month
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.

We will be talking to the finance ministry and I think we have a chance of getting the money back
David Crawford,
Oxfam country director

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".




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