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‘Moonshine’ use rises as Excise revenue drops 30%

01 Jul 2022

  • Excise Commissioner says tax hikes have failed to reduce consumption
  BY Buwanajee Coralage   Illicit liquor use is reported to be on the rise due to the price hikes of liquor attributed to the increase in retail tax as well as the increase in the price of sourced raw materials and the cost of production, which has in turn resulted in the decrease of the revenue of the Excise Department by 30%. Speaking to The Morning yesterday (30 June), the Commissioner of Excise (Law Enforcement) Kapila Kumarasinghe said that with the current crisis situation and the new taxes that are being enforced on liquor, a diversion of the market is seen towards illicit liquor.  “The Department is concerned about the health hazards that this shift might bring about rather than the decrease in revenue of the Department by 30%. The recent attempt to reduce the use of liquor by increasing prices and taxation has not really resulted in the outcome that was anticipated,” said Kumarasinghe. Speaking further, he noted how special attention is being paid to track down illicit liquor makers and other parties involved in this illegal business. Approximately 1,200 Department personnel are said to be deployed islandwide to arrest such individuals involved in the illicit liquor trade and to prosecute them under the law. Through this, the Department is expecting a decrease in the spread of illicit liquor in the island. It was revealed at the Committee on Public Finance (COPF) recently that the demand for liquor has decreased by about 30% due to the recent increase in the price of liquor and the decrease in the income of the people of the country. This was revealed at a meeting of the Committee on Public Finance chaired by Hon. Anura Priyadarshana Yapa, Member of Parliament on 20 June. Officials at the meeting said that there were several problems in the Sri Lanka Excise Department reaching the target revenue due to the limited quantity of ethanol available for the production of liquor, limited number of diesel and fuel and distribution problems. It was also stated that due to the sudden price hike there is a tendency to increase the production of illicit liquor.


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