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Editorial

Booze, hooch and taxes

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Writing his chairman’s review in the latest annual report of the Distilleries Company of Sri Lanka PLC (DCSL), the country’s biggest liquor manufacturer, Mr. Harry Jayawardena warned that pure coconut arrack may soon be history. This prediction was based on the price of this super-taxed product, which has made it totally unaffordable to the consumer. Obviously Jayawardena is talking from the perspective of the manufacturer, but nobody would or could dispute his logic. People don’t drink kasippu out of choice. The price stick, freely used by all governments, has driven imbibers into the arms of the illicit hooch mudalalis. Gone are the days when ‘Pol’ and ‘Gal’ arrack was priced at ten and eight rupees a bottle respectively. Today a bottle of ‘Gal’ costs Rs. 1,600, ‘Pol’ Rs. 1,750 and if you want it double distilled, a bottle would set you back a cool 2,000 bucks.

‘Pol’ of course refers to coconut arrack while ‘Gal’ stood for what was produced out of potable alcohol obtained as a byproduct of the Gal Oya sugar industry. The word “byproduct” was a clear misnomer; the sugar industry, whether at Gal Oya, Pelwatte or wherever, has long been making more money out of the alcohol distilled from the sugar cane molasses than from the sugar itself. This was probably why a previous government took over the listed Pelwatte Sugar Manufacturing Company established to help the country to be self-sufficient in sugar. While a private sector chairman of Pelwatte pre-takeover freely admitted that the company made more money from its alcohol byproduct that from its sugar, where the alcohol Pelwatte produces goes now is anybody’s guess. The budget debate would have been an opportunity to ask that question and get a very useful answer; but that did not happen.

We are writing this in the context of what emerged during the budget debate which ended on Thursday after 20 days of sound and fury with the predictably comfortable passage of Budget 2021. There was a lot discussion there about “artificial toddy,” something that Harry Jayawardena too has been talking about for many years. Matara District MP Buddhika Pathirana (SJB) estimated state coffers were being robbed of as much as Rs. 80 billion in excise revenue by artificial toddy manufacturers exploiting loopholes in the law. Pathirana says that the artificial toddy industry is rooted in the southern coastal area where a cocktail of urea, ammonia, nickel-cadmium from old cell phone batteries and sugar is used in a lethal brew.

He explained that the extent of the problem can be gauged with some simple arithmetic. Apparently only about one and a half liters or toddy can be had from a single coconut palm. Adding up the number of trees tapped and the volumes offered to distilleries, Pathirana estimates a discrepancy of 60-70,000 liters. Dangerously, it’s not only imbibers choosing to down rotgut with the attendant health implications, but also ordinary householders buying what they think is coconut vinegar who are at risk, he has pointed out. The Excise Department is well aware of the existence of this artificial toddy racket, which is a continuing one, although it does not agree that the Rs. 80 billion revenue loss that is alleged is accurate.

DCSL which took over the assets of its state-owned predecessor, the Distilleries Corporation during the Premadasa administration, when the government arrack monopoly (or near monopoly) was ended has long been conscious of the fact that it is a player in a so-called ‘sin industry.’ It has from the time of its first chairman, former Civil Servant V.P. (Totsy) Vittachi, been diversifying into various other businesses. Given that over 90% of what you pay for a bottle of arrack (or a single cigarette for that matter) are taxes the manufacturers are collecting for the government, and the payments to the state are not instantly made, a massive cash tranche is available to them to make other investments. This DCSL has cleverly done over the years, and its holding company, Melstar, is a highly diversified conglomerate into a variety of businesses. Ceylon Tobacco Company (CTC) has not done likewise to the extent of DCSL although it once diversified into insurance like its parent, British American Tobacco. However CTC pays its tax collection to the Treasury on a weekly basis. We do not know how it works where DCSL is concerned.

State Minister Nivard Cabraal who is the virtual Deputy Minister if Finance (the Prime Minister holds the finance portfolio) has called for a report from the Excise Department and the Secretary to the Treasury on matters that emerged in Parliament during the discussion. He acknowledged Pathirana’s useful contribution to the debate and assured follow-up on matters raised. The hard liquor industry has not only been a substantial source of government revenue, but had also produced many millionaires in this country. Arrack has made fortunes for different entrepreneurs from the Dutch and British colonial era when so-called arrack renting was a lucrative business. There has been generous philanthropy arising from such fortunes with, for example, the founding of Visakha Vidyalaya by Mrs. Jeramias Dias (Selestina Rodrigo) of Panadura. Ironically, Arthur V. Dias (popularly known as Kos Mama because of his campaign to plant jak trees), the son of Jeramias Dias, became a leader of the temperance movement at a later time.

It is common knowledge that the illicit liquor industry rampant in the country not only costs the government desperately needed revenue but also is at the root of corruption in the various enforcement agencies. Political patronage to this menace has been freely alleged over the years as have similar allegations with regard to narcotics. Prohibition has not proved a success wherever it was attempted. Government must necessarily balance competing interests including revenue, the cost of alcohol related disease to the healthcare system, the damage drunkenness causes innumerable families and many more in designing its alcohol policies. There’s a lot wrong with what prevails – artificial toddy is just one aspect.



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Editorial

Underworld going great guns

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Saturday 12th September, 2026

Killings are reported with monotonous regularity in this country. Two children were killed in a grenade attack on a house in Dehiwala in the early hours yesterday. Their father, who sustained serious injury in the attack, is receiving treatment in hospital. The attackers came, lobbed the grenade and fled in a trishaw. The police have blamed an underworld gang for the attack, claiming that the attackers had mistaken the victims’ house for the residence of an associate of a rival drug dealer.

Whenever a shooting incident occurs, the police promptly attribute it to gang rivalries. True as their claims may be, the fact remains that the underworld has demonstrated its ability to strike anywhere at will. Nobody is safe. When the members of dangerous criminal gangs become targets of assassins, the vulnerability of law-abiding citizens goes without saying. The government and the police insist that their operations against underworld gangs have weakened crime syndicates considerably. If so, how is it possible that criminal gangs are operating so freely?

Crime syndicates have emerged so powerful that they even intimidate the lay custodians of holy shrines dedicated to the guardian deities of this country. They threaten to attack religious processions. One may recall that two months ago a drug dealer, known as Kanjipani Imran, operating from overseas, threatened to kill the Basnayake Nilame of the Devinuwara Devale if the annual perahera of the shrine included the popular kavadi segment without the participation of a group of dancers banned by the Devale authorities on disciplinary grounds. Imran demanded that the ban be lifted so that the dancers loyal to him could perform in the procession. The Basnayake Nilame refused to give in despite repeated threats. The police decided to have the kavadi dance scrapped in view of underworld threats and announced their decision. They claimed they had been compelled to do so as there were complaints of indecent exposure against sarong-clad kavadi dancers. No sooner had they made that announcement than they had to make an about-turn under government pressure, allowing all kavadi groups, including the one backed by Imran, to participate in the perahera. Thus, Kanjipani Imran had the last laugh.

Previous governments had their favourites in the underworld and shielded them. The J. R. Jayewardene government had criminals, such as Gonawala Sunil and Kalu Lucky, to do its dirty work. Kalu Lucky threw stones at the Supreme Court judges’ houses at the behest of his political masters who were resentful over some apex court judgements. The Ranasinghe Premadasa government shielded the likes of Soththi Upali. Beddegana Sanjeewa worked for the Chandrika Kumaratunga government, and the Mahinda Rajapaksa government had an underworld army led by notorious criminals like Julampitiya Amare and Wambotta. It is being asked in some quarters why Kanjipani Imran has not been arrested overseas and brought back. Even Makandure Madush, known as Sri Lanka’s Napoleon of Crime, was arrested in Dubai and brought here in 2019.

Frequent incidents of violence that snuff out lives may arise from fierce turf wars among drug dealers, as the police claim, but they pose a serious threat to public security. Hence the need for stringent action to prevent them. Informants are also among the victims of underworld violence. It is incumbent upon the police to redouble their efforts to neutralise the underworld.

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Editorial

A flight of fancy

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Friday 11th September, 2026

President Anura Kumara Dissanayake’s recent announcement that the government would set up 50 new universities came while university teachers were urging the government to solve a host of issues affecting their institutions. The Federation of University Teachers’ Associations (FUTA) lost no time in responding to the President’s grand plan.

FUTA Secretary Senior Lecturer Charudatta Ilangasinghe stressed that the government should focus on maintaining, funding, and improving the existing 17 state universities. Several key Opposition figures and opinion makers have also questioned the feasibility and prioritisation of establishing 50 more universities.

FUTA staged a protest the other day to pressure the government into addressing the structural problems affecting the university system. It is doubtful whether the government took any notice of the FUTA trade union action. Power blinds rulers to ground reality and drives them to bulldoze their way through.

The JVP-NPP government ought to get its priorities right. True, it cannot be held responsible for the current university crisis, which is not of recent origin. But it will have to take urgent steps to address the problems besetting the state universities. Previous governments let their political agendas take precedence over the wellbeing of the university system. They increased university admissions without adequately expanding academic staff and infrastructure. There is no gainsaying that university intakes should be increased for the benefit of students, but there should be a corresponding increase in resource allocations if universities are to function efficiently. FUTA has warned that university admissions based on the 2025 GCE A/L results could be delayed by one to two years until the enrolment of two previous batches.

All state universities in this country are being pushed beyond their capacity. Rising student numbers have placed enormous pressure on the already inadequate academic and physical resources. In 2025, FUTA pointed out that the annual student intake had steeply increased from around 25,000 in 2015/2016 to about 45,000, causing a severe strain on the entire university system. According to media reports quoting FUTA, state universities are operating with only about 6,800 permanent academics though there is a requirement of 12,000–13,000 teachers. FUTA has stated that PhD holders are unwilling to work for the current salaries, which are heavily taxed. Universities are among the state institutions worst affected by the human capital flight.

Among the burning issues highlighted by FUTA over the years are chronic staff shortages, brain drain, funding constraints and insufficient remuneration, lack of infrastructure and research, challenges to university autonomy and academic freedom, deterioration of the quality of higher education, and the misdirection of education reforms. Successive governments have sought political solutions to serious structural problems affecting the state university system.

As we pointed out in a previous comment, students in other Asian countries typically complete their first university degrees before they turn 21–24 years, but Sri Lankan students, particularly those in the state university system, often graduate in their mid-20s, with 24–26 years being a commonly observed range, according to the OECD (Organisation for Economic Co-operation and Development) data. The late entry of Sri Lankan graduates into the workforce has economic, political and social consequences, and, above all, the delayed graduation places Sri Lankan graduates at a disadvantage in the global job market. This sorry state of affairs is basically due to cumulative institutional delays involving, among other things, the GCE A/L examination, university admissions, disruptions caused by strikes, irregular academic calendars, a shortage of academic and non-academic staff, student protests and university closures.

Modern universities are more than centres of academic excellence. They are central to the development of nations; they not only educate graduates in the conventional sense of the term but also generate new knowledge, skills and innovations, driving modern economies. The OECD has identified higher education as a key source of advanced skills in many countries, universities being the main providers of basic research that underpins innovation.

It is hoped that the government will put its grandiose plan to set up 50 universities on hold and intensify its focus on equipping the existing 17 seats of higher learning to meet current and future challenges.

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Editorial

22A: Flawed logic and mistruths

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Thursday 10th September, 2026

Sri Lankan politicians are notorious for carrying out personal attacks instead of countering arguments. So, the JVP-NPP government’s attack on the Commonwealth Lawyers’ Association (CLA) in Parliament on Tuesday (08) came as no surprise. The CLA, whose President Steven Thiru attended the recent Supreme Court (SC) hearing of petitions against the 22nd constitutional amendment (22A) bill, as an observer, has raised concern over several key issues, such as the rejection of a request for a full bench, the refusal of a request for the Chief Justice’s recusal, non-inclusion of senior judges on the SC bench, and the denial of opportunity for petitioners to make oral submissions.

Minister of Justice Harshana Nanayakkara took great pains to belittle the CLA, in Parliament on Tuesday, claiming that it was not an organisation officially recognised or registered under the Commonwealth Secretariat. It was a private club whose members paid fees for membership, he claimed. Deputy Minister Sunil Watagala joined the Justice Minister in bashing the CLA. Both of them are lawyers.

The government also resorted to the classical straw-man approach; misrepresenting the CLA arguments as biased views of an organisation lacking Commonwealth recognition, it claimed that they were both unacceptable and unworthy of consideration. The CLA’s observations on the SC hearings went unchallenged in Parliament for all intents and purposes.

Defending the CLA and its observations, Opposition Leader Sajith Premadasa said that if the government did not recognise the CLA it ought to make a formal statement in Parliament to that effect. The ruling party members ignored his challenge. Another Opposition MP demanded to know why the Justice Minister said he had agreed to meet Steven Thiru if he thought the CLA was only a private club.

There is no way the government can justify its diatribe against the CLA. This is what the Commonwealth Secretariat’s own website says about the CLA: “The CLA’s objectives are to maintain and promote the rule of law throughout the Commonwealth: CLA is a pan-Commonwealth organisation which seeks to uphold the rule of law in the Commonwealth by encouraging exchange of ideas between legal professionals, academics and students, through projects and by driving improvements in legal education. It holds a number of short events throughout the year and has a biennial conference, the Commonwealth Law conference, which regularly attracts over 1,000 delegates including some of the finest legal professionals in the world today to discuss issues of interest to the profession over a four-day period.” It will be interesting to hear what the government has to say about this? One can only hope that in a bid to defend the indefensible, the JVP-NPP bigwigs will not condemn the Commonwealth itself as a colonial relic that perpetuates the imperial legacy, facilitates British soft power, reproduces unequal North-South relationship, retains the monarchy as an important symbol of its imperial past, and serves elite interests.

Besides the CLA, the International Association of Judges, representing 93 national organisations across five continents, LAWASIA and the French National Bar Council have taken exception to 22A. In fact, counsel, warnings and criticism need not come from experts for them to be worthy of consideration. For example, a warning that the rear wheels of a heavy vehicle being reversed are dangerously close to the edge of a precipice could come from a child. To disregard such warnings is to invite disaster. One may recall that it was a child who told the proverbial emperor that he was waking in the buff while everyone else was pretending to admire his new clothes.

Meanwhile, the position of some prominent civil society activists and public intellectuals on 22A defies logic. One could argue that they are engaged in an intellectual steeplechase, skillfully clearing all obstacles except the key issues, especially the possible politico-legal consequences of 22A. Perhaps, they are wary of offending President Anura Kumara Dissanayake by expressing their candid views and therefore behave like the proverbial curate who lacked the courage to say an egg on his plate was bad and in deference to his host and Bishop claimed that parts of it were excellent.

If raising mandatory retirement ages is a sine qua non for making a system efficient and doing away with delays, as the government has claimed in the case of the judiciary, then one can argue that the retirement ages of doctors, university teachers, and other state employees must also be raised as part of a strategy to do away with delays that characterise government hospitals, universities, the Department of Motor Traffic, the Department of Registration of Persons, the Department of Immigration and Emigration, the Colombo Port, the state-owned bus service, etc.

The SC determination on 22A is yet to be announced. Nevertheless, if the legitimacy and acceptability of laws derive solely from SC determinations thereon, then one can argue that no one should be critical of the 18th Amendment (2010), which abolished the presidential term limit and concentrated more power in the executive presidency for the benefit of the then President Mahinda Rajapaksa, and the 20th Amendment (2020), which allowed dual citizens to serve as legislators, benefiting the then President Gotabaya Rajapaksa’s sibling Basil. Those amendments passed muster with the apex court but obviously lacked legitimacy and acceptability. The Prevention of Terrorism Act was also ‘duly passed’ by Parliament, but it is one of the worst laws this country has ever seen. The same holds true for 22A, crafted to enable the JVP-led government to consolidate its grip on power and lay the foundation for the perpetuation of its rule. NPP General Secretary Dr. Nihal Abeysinghe has publicly stated that the JVP/NPP will be in power until 2050. One may recall that the JVP went on a killing spree and destroyed state assets worth billions of dollars in a bid to scuttle the 13th Amendment, which was passed by Parliament with a five-sixths majority. So, as for 22A, problems will not go away even if the government succeeds in securing its passage.

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