Oxfam pays $1m tsunami aid duty

BBC NEWS | World | South Asia: "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. 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.

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. 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". 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". "