News
Illicit artificial toddy trade deprives govt. of Rs. 80 billion in revenue annually
State Minister promises remedial action
By Saman Indrajith
One of the topics that kept reverberating throughout the budget debate that ended in parliament last Wednesday was the drain of excise revenue as a result of loopholes in the tax net by artificial toddy manufacturing businessmen.
Various facets of the issue were raised by SJB Matara District MP Buddhika Pathirana during the question time on three separate days highlighting the severity of the damage inflicted on the national economy by tax evading toddy businessmen who deprive the government coffers of a whopping Rs. 80 billion annually.
Following the disclosure by MP Pathriana, State Minister of Money & Capital Market and State Enterprise Reforms Ajith Nivard Cabraal promised remedial action.
Commissioner-General of Excise, Ariyadasa Bodaragama, acknowledged that there exists a tax leakage but he was wary of the figure of Rs. 80 billion.
Bodaragama is due to retire at the end of the month. Deputy Commissioner-General of the Inland Revenue Department, M. J. Gunasiri has been named as his successor.
Challenges before Gunasiri, as the new Excise Commissioner-General, are enormous, and whether he would be able to help Minister Cabraal deliver on his promise remains to be seen.
As Gunasiri earlier served as Deputy Commissioner-General Tax Administration (Corporate Small Entities & Non Corporate Sector) at the Inland Revenue Department, his expertise may be useful to remedy the situation. However, he has only three more months of service before his retirement. Unless he is given a service extension, the task of finding solutions to the tax evasion issue raised by Pathirana will probably have to wait till another Commissioner-General is appointed.
Pathirana told The Sunday Island that the government coffer is bound to lose over Rs. 80 billion a year due to tax evasion by artificial toddy manufacturers and the ramifications to the national economy are more acute if the health cost is also taken into account.
“We have seen many instances of serious health problems that illicit brewers caused to the people. Artificial toddy is produced by mixing urea, ammonia, nickel cadmium of old batteries and sugar. This harmful brew is sold at liquor shops and used for manufacturing ‘coconut arrack’ and vinegar.
“Suppose we overlook tipplers who consume the toxic brew knowingly or unknowingly, what about innocent consumers who buy vinegar? In Sri Lankan food culture, vinegar is an integral part. Imagine the number of people who get ill because they consume vinegar made of artificial toddy,” the MP said.
“The artificial toddy industry is well-rooted in coastal areas in the south. If one checks the number of trees tapped and the number of liters of toddy being sold, it is a very simple calculation to understand how much artificial toddy is being consumed. Only around one and a half litres of toddy could be tapped from a single coconut palm. As per reports of coconut researchers, the amount could vary slightly due to factors such as climate, humidity and season. The amount being sold by license holders varies from the actual amount extracted from palms. A difference is in the region of 60,000-70,000 litres. So, it is obvious that toddy comes from other sources”, he noted.
There have been raids by police and STF but toddy businessmen continue to ply their trade because the police cannot take the culprits before courts as per Sections 49, 50 and 52 of the Excise Ordinance. They have to hand over the suspects and the equipment to excise officers, who most of the time do not produce the suspects in courts but release them after filing a Technical Crime Report (TCR), the parliamentarian further said.
“Under the TCR, the racketeers only have to pay a small sum by way of a composition fee. The TCR is actually one of the loopholes these businessmen get out so easily. I pointed out all these to the government. I hope Minister Cabraal will act as promised. I also pointed out to him that there are not only excise officers but some finance ministry officials who benefit from the artificial toddy business. I hope and pray that the minister will be able to remedy this situation,” Pathirana added.
President of the Nawa Sinhala Rawaya, Ven Magalkande Sudattha Thera said the illicit toddy industry is thriving despite isolated raids. The police and the STF conducted successful raids in many areas in the recent past. Thereafter, the police hand over the suspects and equipment to the Excise Department for legal action. Excise Department officials file a TCR and release them on a composition fee.
Many illicit toddy producers have licences for toddy tapping. So finding sugar, ammonia, yeast, batteries in toddy amounts to only a technical error; it becomes a technical crime if they suspect that the manufacturer had purposefully mixed them with toddy or produced toddy using them as ingredients. During a recent raid, the police found three bags containing 25 kilos of ammonia to be used to produce toddy. How could the government ensure public safety when poison is being sold in bottles in the name of toddy, the prelate asked.
President of the consumer watchdog National Movement for Consumer Rights Protection, Ranjith Withanage said that old mobile phone batteries were also being used in the fermentation process of artificial toddy.
He said a countrywide survey conducted by his organisation revealed that discarded mobile phone batteries and power banks and chemicals such as urea were used to produce artificial toddy.
“We have information that such toddy is being sold to produce coconut arrack and vinegar. Arrack and vinegar made from artificial toddy were sold in the market while those responsible for preventing consumers from such harmful products have done nothing so far to raid shops and places that sold them”, he asserted.
Withanage said that local arrack and vinegar made from artificial toddy have been identified as one of the main causes of chronic kidney diseases.
He further said the government loses over Rs 180 billion a year due to the illicit liquor and tobacco (Rs. 100 billion on illicit liquor and tobacco and Rs. 80 billion on illicit toddy).
“We expected the government to present budget proposals to counter the loss of revenue, but there was none”, he added.
Excise Department spokesman, Deputy Commissioner, Kapila Kumarasinghe said there were instances where toddy manufacturers were caught for using illegal methods to increase the volume of alcohol. Water, sugar, urea, yeast and salt are being used to get a high content of ammonia in toddy.
He said that toddy is being sold in taverns as fresh toddy and bottled toddy after pasteurizing so that they could be kept for one to two weeks. Toddy is also being sold for the production of vinegar. If toddy with additives are used to distill arrack, the machines extract only the alcohol and the additives are discarded as ‘spent-wash’. The distilling machines are calibrated only to extract alcohol, and not other elements in the raw materials.
In the most popular brands of arrack sold in the market, there is only three percent toddy and 97 percent water, ethanol and rectified spirits. Adding alien items during production is illegal,” he warned, adding that the Excise Department with its available resources is fighting hard not only against the artificial toddy industry but also other narcotics and drugs, he said.
Excise Commissioner General Bodaragama acknowledged there was a significant loss of excise revenue due to various tactics used by toddy manufacturers.
He said that there is a leakage of tax revenue but assured that he was certain that it could not be Rs. 80 billion.
State Minister of Money & Capital Market and State Enterprise Reforms Ajith Nivard Cabraal told The Sunday Island that Pathirana had raised this issue several times in Parliament and he had already instructed Secretary to the Ministry of Finance and the Excise Department officers to submit a comprehensive report to him on the matter.
The toddy industry extends from Kalutara, Gampaha, Puttalam, Badulla, Moneragala, Hambantota, Anuradhapura to the Northern and Eastern provinces. As at Dec. 31, 2019, there were 3,094 licensed toddy tappers and 32 licensed toddy producers in the country.
“There could be many more engaged in supportive services for their livelihood but we have no exact details on them”, he noted.
“Pathirana made constructive suggestions and we took note of them. We are thankful to his efforts and are determined to remedy the situation. I intend to study this matter first with my officials. I assure you that this would be studied properly and necessary action initiated”, the Minister assured.
News
National progress can be achieved only when everyone fulfills the responsibilities entrusted to them with steadfast determination, unity of purpose and resilience in the face of any challenge – President
President Anura Kumara Dissanayake stated that national progress cannot be achieved through suspicion and mistrust of one another, but only when everyone fulfills the responsibilities entrusted to them with steadfast determination, unity of purpose and resilience in the face of any challenge.
The President pointed out that by properly fulfilling the responsibilities entrusted to the President and the Government, to religious institutions, to the people and to the security forces, it is possible to swiftly rebuild the motherland with the pride and dignity that once belonged to us in history. The President invited everyone to work together towards this goal.
President Anura Kumara Dissanayake made these remarks on Saturday (21) morning while attending as the Chief Guest at the Commissioning and Passing Out Parade of cadet officers at the Sri Lanka Military Academy in Diyatalawa.
While noting that Sri Lanka possesses a proud heritage and a history of victories, the President stated that the country has suffered multiple forms of decline over the past few decades. He added that the responsibility entrusted to everyone today is to transform the motherland once again into a state that commands high value and respect on the global stage.
The President stated that, as President and as a government, he would do his best to fulfill the responsibilities entrusted to him in rebuilding the nation. He further noted that the Government is fulfilling its responsibility to rebuild the economy and establish the necessary mechanisms for it, to strengthen the rule of law and to transform politics from a profession that amasses public wealth into one that serves the people.
Commander-in-Chief President Anura Kumara Dissanayake, who arrived at the Diyatalawa Military Academy, was received with full military honours.
This marked the 100th Passing Out Parade of the Diyatalawa Military Academy, the Army’s premier officer training institution that has produced heroic leaders for both the nation and the Sri Lanka Army. A total of 240 cadet officers belonging to Regular Cadet Courses Nos. 93 and 94B, Short Course No. 23, Regular Course No. 62 and Volunteer Female Cadet Course No. 19 were commissioned into the Army following successful military training. Notably, this group also included eight foreign cadet officers.
The Commander-in-Chief, President Anura Kumara Dissanayake inspected the Passing Out Parade of the cadet officers and presented the Championship Colours to the best cadet squad, swords to the commissioned officers and Presidential Merit Awards to the officers who secured first place in their respective courses.
Addressing the gathering, President Anura Kumara Dissanayake further stated that the role played by the Army for the country and its people during every difficult situation is commendable and he expressed special appreciation for the outstanding service rendered in rescuing civilians and providing assistance during the recent cyclone.
Addressing the Passing Out Parade, the Commander-in-Chief, President Anura Kumara Dissanayake, further stated;
“Having entered the Sri Lanka Military Academy in Diyatalawa as cadet officers and received internationally recognised training and education, you are being commissioned today. I believe this will be a very special moment in your lives. I wish you every success as you move forward in your professional careers and strive to achieve your future aspirations and hopes.
At this moment, your parents are watching you. From your early childhood, they wished for a good future for their children. Today is a special moment for them to feel proud of you. Seeing their child standing before them, bearing the responsibility of the motherland and holding the honoured sword of the Army in their hands, is a source of immense pride. Today, you have given your parents the highest respect and recognition they deserve.
I am confident that you will fulfill your parents’ hopes and expectations and lead a meaningful life while safeguarding the dignity and value inherent in this profession.
Your senior officers are also watching you. Through great sacrifice and by enduring challenging periods, they have preserved the honour, value and professionalism of the Sri Lanka Army.
Under their supervision and proper guidance, you have received your training and are being commissioned today. The Commander of the Army and the senior officers are observing you with expectation, hoping that you will continue to uphold and protect the honour and values they brought to this profession.
The Government, I as President, and our motherland place great expectations upon you. Our country has faced many challenges during different periods. In overcoming those challenges; your senior officers have sacrificed their lives for the security, peace and people of this motherland. You stand today on soil sanctified by those who sacrificed their lives in heroic struggles to liberate our motherland.
Therefore, an inescapable responsibility rests upon all of us. As members of the Sri Lanka Army, you bear an irrevocable duty to ensure the security of our motherland and its people. We place our trust and hope in you. Our country faced a major disaster due to the cyclone and civilian life was completely disrupted. Providing food to certain communities became extremely difficult and rescuing some lives posed significant challenges. From that day to this, the Sri Lanka Army has played a major role in confronting every challenge. I take this opportunity to express my gratitude to them.
Members of the armed forces are engaged in extremely demanding tasks, making great efforts to restore normalcy to civilian life. The responsibility placed upon you is not merely that of a profession. There are many different professions and your friends are engaged in various occupations. Each of those professions carries its own responsibility and values. However, I believe that you have been entrusted with exceptionally high values and a tremendous responsibility rests upon your shoulders.
We must rebuild our motherland. From many directions, our country has faced serious threats. There was a period when the state machinery weakened and collapsed and another when the economy was severely challenged and deteriorated. There was a time when social wellbeing completely eroded. Human relationships began to lose their value. Relationships between parents and children began to break down. Relationships between teachers and students began to deteriorate. Relationships between religious institutions and their congregations began to weaken. Our country was moving towards becoming a state where all human relationships had broken down.
Now, the responsibility entrusted to us is to transform this motherland into a state that commands high values and recognition in the world. Similar responsibilities are entrusted to you as well. This country cannot be taken forward by working against one another or by acting with suspicion and mistrust. As a nation, we can progress only if all of us act with firm determination to properly fulfil the responsibilities entrusted to us. I pledge to you that, as a state, we will utilise the responsibilities entrusted to us to rebuild this nation.
I invite everyone to work together towards this goal.”
Deputy Minister of Defence Aruna Jayasekara; Secretary to the Ministry of Defence, Air Vice Marshal (Retired) Sampath Thuyacontha; Commander of the Army, Lieutenant General Lasantha Rodrigo; Commander of the Navy, Vice Admiral Kanchana Banagoda; Commander of the Air Force, Air Marshal Vasu Bandu Edirisinghe; and Inspector General of Police, Attorney-at-Law Priyantha Weerasuriya, along with the Commandant of the Sri Lanka Military Academy, Major General M.J.R.N. Medagoda, defence coordination officers, senior Army officers, and the parents of the graduating cadet officers, were among those present on the occasion.
News
PM meets UN Resident Coordinator
A meeting between Prime Minister Dr. Harini Amarasuriya and the United Nations Resident Coordinator in Sri Lanka, Marc-Andreé Franche, was held on the 20th of December 2025 at the Prime Minister’s Office.
During the meeting, Mr. Marc-Andreé Franche commended the swift coordination in which the Government acted to rescue affected communities and provide relief following the recent natural disaster situation faced by Sri Lanka.
Comparing experiences from other countries around the world, he noted that the level of international support Sri Lanka has received during such a disaster is exceptionally high. He further emphasized that he would utilize both his professional capacity and personal commitment to the fullest extent to ensure that Sri Lanka receives the necessary assistance.
Expressing appreciation for the continuous support extended by the United Nations to Sri Lanka, the Prime Minister stated that the role played by both the political authority and public officials in the field during this disaster management effort was exemplary. She highlighted that the collective and coordinated efforts of all parties from district leadership to the ground-level officials have become part in this success.
The Prime Minister also affirmed that the Government remains committed to properly managing the international assistance received and to rapidly restoring normalcy to the lives of people in the affected areas.
The meeting was attended by the secretary to the Prime Minister Pradeep Saputhanthri and Secretary to the Ministry of Education Nalaka Kaluwewa
[Prime Minister’s Media Division]
News
Suspension of Indian drug part of cover-up by NMRA: Academy of Health Professionals
President, Academy of Health Professionals, Ravi Kumudesh, yesterday (22), alleged that the National Medicines Regulatory Authority’s (NMRA) decision to suspend several batches of Ondansetron Injection USP 8 mg/4 mL (Batch Nos: OD24021E, OD25009E, OD25024E, OD25023E), following suspicions of patient complications, and a few reported deaths, seemed to be a bid to cover-up the latest public health sector crisis.
Kumudesh said so responding to The Island queries.
Kumudesh pointed out that the Chief Executive Officer of the NMRA, and other responsible officials of the Ministry of Health, were on record as having said that the alleged bacterial contamination in the medicine in question was based on laboratory test results generated at the Microbiology Laboratory of the National Hospital, Kandy.
He, however, emphasised that the Kandy facility lacked legally mandated facilities, validated systems, or regulatory accreditation required to conduct pharmaceutical sterility testing in accordance with internationally accepted regulatory standards.
“The Academy of Health Professionals is aware that the Microbiology Laboratory of the National Hospital, Kandy, does not possess the required facilities,” Kumudesh said, urging the government to come clean in this matter.
Kumudesh said the regulatory action taken by the political authority was aimed at deceiving the public, and theAcademy of Health Professionals had raised the issues with Health Minister Dr. Nalinda Jayatissa, Health Secretary Dr. Anil Jasinghe, NMRA head Dr. Ananda Wijewickrama and Director General Health Services (DGHS) Dr. Asela Gunawardena.
Kumudesh pointed out that the Kandy facility was meant to meet requirements within the Kandy National Hospital and not a world standard testing lab. Kumedesh sought an explanation as to how the suspended Ondansetron Injection had been administered on 13 December to a person warded at the hospital where NMRA head is based, a day after the NMRA decided to suspend it.
Public health sector trade union activist Kumudesh said that the Health Ministry couldn’t turn a blind eye to the disclosure that post-mortem reports of two persons, who allegedly died after being given the same medicine by the National Institute of Infectious Diseases, did not identify the medicine as the cause of death. According to him, the National Institute of Infectious Diseases administered the same medicine to patients, on multiple occasions, in the wake of the controversy.
Kumudesh said that it would be the responsibility of the government to ensure a comprehensive technical, legal, and administrative investigation into, what he called, Ondansetron affair. Having lambasted all previous governments of waste, corruption and irregularities, at the expense of the hapless public, the NPP couldn’t, under any circumstances, side-step the issue. “In the interest of transparency, regulatory credibility, and the protection of public health, this should be properly investigated,” Kumudesh said.
The crux of the matter was that the very basis of NMRA’s suspension of Ondansetron batches seemed to be irregular and questionable, Kumudesh said.
The Academy of Health Professionals, in its letter to Dr. Jayatissa, sought the Health Ministry’s response to the following questions: 1. Who requested the Microbiology Laboratory of the National Hospital, Kandy, to conduct sterility testing on this medicinal product?
2. Under what legal provisions was such a request made, and on what basis was the laboratory authorised to accept and perform such testing?
3. Who conducted the test, and who issued the report? Did those individuals possess the requisite professional qualifications, regulatory authorisation, and legal mandate to do so?
4. Did the laboratory possess the required infrastructure, validated testing systems, quality assurance mechanisms, and specialised training necessary to perform pharmaceutical sterility testing in compliance with regulatory standards?
5. If patient complications were attributed to microbial contamination, were all related materials—including syringes, IV lines, infusion fluids, and other associated devices—systematically tested? If not, on what scientific basis was it concluded that the contamination originated exclusively from the medicine?
6. Given that the NMRA is legally empowered to suspend a medicine as a precautionary measure, even without laboratory confirmation, when serious safety concerns arise, what was the justification for relying on an irregular and non-regulatory laboratory test instead?
Kumudesh stressed that Ondansetron, and nine other injectable medicines that had been suspended, were all ordered by the State Pharmaceutical Corporation (SPC) from an Indian manufacturer, Maan Pharmaceuticals.
By Shamindra Ferdinando
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