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10% of monthly household budget on alcohol: IPS

10% of monthly household budget on alcohol: IPS

17 Apr 2024

As evidence for the economic burden imposed by non-communicable diseases (NCDs) and the prominent NCD-related risk factor of alcohol consumption, the Institute of Policy Studies (IPS) Research Economist Priyanka Jayawardena revealed that households spend 10% of their monthly budget on alcohol.

She noted that alcohol-related taxation is a cost effective measure to reduce NCD related risk factors, particularly among low-income groups, where the progressive nature of alcohol taxation, concerning which higher-income groups bear more of the tax burden, was underscored.

She informed thus at the “Policy Dialogue on Alcohol Control for a Healthier Sri Lanka” hosted recently by the IPS.

IPS Research Director, Dr. Nisha Arunatilake and the Consultant for the Sri Lanka RESET Alcohol Initiative, Pubudu Sumansekara explained the need to change the disconnect between the public perception of alcohol as a social necessity, and its grave health consequences.

The Chairperson of the National Alcohol and Tobacco Authority, Dr. Alan Ludovyke highlighted the health related costs of alcohol consumption and the disproportionate burden of alcohol-related violence and health issues on vulnerable communities. He stressed the imperative for collaborative efforts among the Government, think tanks, the media, and the civil society to address these challenges.

IPS Research Fellow Dr. Lakmini Fernando highlighted the potential of increased Excise duty rates to reduce alcohol consumption while generating Government revenue, in turn contributing to the economic recovery. Challenges related to data availability for accurate modelling were acknowledged, emphasising the need for quality disaggregated data for informed policy decisions. The importance of designing a medium-term alcohol tax policy that considers both revenue generation and health related impacts, thereby ensuring a balanced approach to alcohol control, was recommended. IPS Research Economist Sunimalee Madurawala discussed the intricate dynamics of industry interference in alcohol policy.

A total of 83% of deaths are attributed to NCDs. Alcohol consumption emerges as a prominent risk factor for NCDs, exacerbating health related costs and contributing to issues such as road accidents and domestic violence. Despite its perceived economic benefits, the economic toll of alcohol-related conditions surpasses any revenue generated. The World Health Organisation estimated that in 2015 alone, the economic cost of alcohol related conditions amounted to United States Dollars 885.86 million, equivalent to 1.07% of Sri Lanka’s gross domestic product for that year. 

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