S R Attygalle a senior Treasury official said Sri Lanka imported about 3,000 tonnes of milk powder and the state will lose about 500 million rupees in tax revenues a month from the move.
A day earlier, Titus Jayewardene, secretary of the petroleum ministry said import taxes on petrol were cut by 10 rupees to 5 to stem losses in state run Ceylon Petroleum Corporation and listed Lanka IOC distributors.
The distributors sell fuel and government dictated prices.
Sri Lanka raised taxes on many imported commodities after a commodity bubble collapsed in 2008 in the wake of a bursts credit bubble in the United States.
But the Federal Reserve has been printing money heavily since then and the banking system has strengthened since then giving potency to monetary policy again and weakening the value of the US dollar against commodities.
Food commodities, base metals, minerals and precious metals have started to bubble again. Sri Lanka is pegged to the US dollar and its prices are directly anchored to the US dollars unlike a country with an independently floating currency.