Editorial
Booze, hooch and taxes
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.
Editorial
Selective transparency
Saturday 27th December, 2025
The NPP government has released a cordial diplomatic letter from Indian Prime Minister Narendra Modi to President Anura Kumara Dissanayake, and gained a great deal of publicity for it as part of a propaganda campaign to boost Dissanayake’s image. Such moves are not uncommon in politics, especially in the developing world, where the heads of powerful states are deified and their visits, invitations and letters are flaunted as achievements of the leaders of smaller nations. However, the release of PM Modi’s letter to President Dissanayake is counterproductive, for it makes one wonder why the government has not made public the MoUs it has signed with India?
PM Modi’s Sri Lanka visit in April 2025 saw the signing of seven MoUs (or pacts as claimed in some quarters) between New Delhi and Colombo. Prominent among them are the MoUs/pacts on the implementation of HVDC (High-Voltage Direct Current) Interconnection for import/export of power, cooperation among the governments of India, Sri Lanka, and the United Arab Emirates on developing Trincomalee as an energy hub, and defence cooperation between India and Sri Lanka.
The NPP government has violated one of the fundamental tenets of good governance––transparency; there has been no transparency about the aforesaid MoUs or pacts, especially the one on defence cooperation. They cannot be disclosed without India’s consent, the government has said. This is a very lame excuse. The JVP/NPP seems to have a very low opinion of the intelligence of the public, who made its meteoric rise to power.
When the JVP/NPP was in opposition, it would flay the previous governments for signing vital MoUs and pacts without transparency. But it has kept even Parliament in the dark about the MoUs/pacts in question.
Ironically, the JVP, which resorted to mindless violence in a bid to scuttle the signing of the Indo-Lanka Accord in 1987, has sought to justify the inking of an MoU/pact on defence cooperation between Sri Lanka and India and keeping it under wraps, about three and a half decades later. The signing of that particular defence MoU/pact marked the JVP’s biggest-ever Machiavellian U-turn. How would the JVP have reacted if a previous government had entered into MoUs with India and kept them secret? It opposed the proposed Economic and Technology Cooperation Agreement (ETCA) between Sri Lanka and India tooth and nail, didn’t it?
Whenever one sees the aforesaid letter doing the rounds in the digital space, one remembers the MoUs/pacts shrouded in secrecy, which have exposed the pusillanimity of the NPP government, whose leaders cannot so much as disclose their contents without India’s consent.
Editorial
Desperate political sandbagging
Friday 26th December, 2025
There is nothing more predictable than surprise in politics. After securing a two-thirds majority in Parliament last year and emerging victorious in most local councils, this year, the JVP-led NPP may have thought that it was plain sailing. But the government now has many unforeseen, seemingly intractable issues to contend with almost on all fronts. The disaster-stricken economy is expected to slow down, with relief and rebuilding costs escalating, and the deadline for the resumption of debt repayment approaching. Vehicle imports are bound to decrease, causing a sharp drop in the government’s tax revenue. The rupee is depreciating fast. As if these were not enough, the government is experiencing serious problems on the political front.
The defeat of the NPP’s budget in the Colombo Municipal Council (CMC), which the JVP/NPP seized control of through extensive horse trading, could not have come at a worse time for the government. The same fate has befallen many other NPP-controlled local councils. Most of all, the NPP has suffered a string of defeats in the cooperative society elections countrywide during the last several months.
Desperate times are said to call for desperate measures. Cyclone Ditwah and the attendant extreme weather events that badly damaged roads, tank bunds and river banks prompted repair teams to resort to sandbag revetment. But there have been many instances where sandbag facings collapsed, unable to withstand the intensity of floods and slope failures. The government politicians who boasted of having carried out swift restoration work have been left red-faced; they have failed to assess the severity of the problems they are trying to solve.
The NPP government has resorted to a method similar to sandbag revetment in a desperate bid to consolidate its control over some local councils which cannot secure the passage of their budgets for want of majorities. Its members have gone to the extent of setting the clock forward in such institutions, meeting in advance of the regular start time and declaring their budgets passed before the arrival of the Opposition councillors. What the NPP did in the Horana Urban Council the other day is a case in point, the Opposition says.
The NPP is accused of having inflated the number of votes for its Galle MC budget amidst a howl of protests from the Opposition and declared victory. The Opposition councillors prevented the council secretary from leaving the auditorium, put the budget to a fresh vote and defeated it. The Opposition has threatened legal action against the Mayors/Chairpersons and the state officials for violating the law. The government is likely to employ a similar method to have the CMC budget passed when it is put to a vote again next week. The JVP has no sense of shame, just like all other political parties that have been in power.
All self-righteous politicians, given to moral grandstanding, lay bare their true faces when their interests are threatened, and they face the prospect of losing their hold on power. The JVP/NPP is now without any right to be critical of its rivals who did not scruple to undermine democratic principles and traditions to retain power.
Gaining control of hung local councils is one thing, but running them to the satisfaction of their members and the public is quite another. The non-majority councils that the Opposition parties have gained control of could face the same fate as the CMC. This situation has come about because the country is without patriotic leaders. Ideally, the political parties that obtained pluralities in the hung councils should have been allowed to control those institutions, and they should have adopted a conciliatory approach and sought their political rivals’ cooperation to serve the public.
The shameful manner in which the NPP acted during the Galle MC budget vote is not unprecedented. One may recall that in January 2024, the SLPP-UNP government did something similar to secure the passage of its despicable Online Safety Bill. The then Speaker Mahinda Yapa Abeywardena stooped so low as to make use of a brawl in the House and declare the Bill passed. Interestingly, the SLPP and the UNP are among those who are raking the NPP over the coals for undermining democratic principles and traditions. So much for the self-proclaimed messiahs and their critics.
Editorial
Christmas spirit, relief and pledges
Thursday 25th December, 2025
Christmas has dawned while Sri Lanka is reeling from the cumulative impact of multiple disasters which snuffed out hundreds of lives and destroyed many homes and livelihoods. It is a time of hope. Its ethos, which emphasises hope, compassion and giving, could not be more relevant in these difficult times when the task of looking after a large number of disaster victims and helping rebuild their shattered lives has become a top national priority.
Santa came here the other day, as it were. There was no magical flight of a sleigh pulled by reindeer across the night sky. Instead, a jet landed at the BIA, and out stepped Indian External Affairs Minister S. Jaishankar. He unveiled a generous disaster relief and reconstruction package from India and flew back. This noble act of giving exemplifies the spirit of Christmas as much as good neighbourliness.
The best way the Sri Lankan rulers can show appreciation for generous assistance from India and other nations is to uphold accountability, rationalise disaster relief and ensure that it is distributed in a transparent manner. There are disturbing reports about political interference with the disbursement of funds among disaster victims. A high-level probe must be conducted into these allegations.
Christmas is also the season of giving and forgiving. The irony of Minister Jaishankar meeting President Anura Kumara Dissanayake, who is also the leader of the JVP, may not have been lost on keen political observers. If the JVP had acted wisely, heeding religious tenets, and pursued its political goals without resorting to violence, in the late 1980s, tens of thousands of precious lives and state assets worth billions of rupees could have been spared. India has forgiven the JVP, which it even helped gain international legitimacy and shore up its electoral chances in the run-up to last year’s presidential election. India has also helped Sri Lanka manage its worst-ever economic crisis and the impact of natural disasters. The people of Sri Lanka have also forgiven the JVP, despite its past violence, as evident from its impressive electoral victories last year. Sadly, the JVP is not willing to forgive its political enemies. Its General Secretary Tilvin Silva himself has said so. It ought to soften its stand.
All political leaders in this country usually issue well-written Christmas messages, extolling the core Christian virtues, such as giving, forgiving, compassion and peace-making. If only they lived up to the ideals they claim to cherish, at least while the country is struggling to recover from a series of natural disasters. Unfortunately, their post-disaster political battles are intensifying apace, and one wonders whether their focus is actually on helping disaster victims or furthering their political interests. They are not willing to sink their political differences for the sake of the disaster victims crying out for relief.
Meanwhile, the government leaders ought to go beyond issuing Christmas messages if they are to prove that they actually care about the believers in Jesus Christ. They ought to fulfil their pledge to serve justice for the victims of the Easter Sunday terror attacks (2019), which claimed more than 275 lives.
About seven years have elapsed since that tragedy which could have been prevented if the then government had heeded intelligence warnings, and the country has had four Presidents and three governments. But the promises made by the political leaders to bring the masterminds behind the Easter Sunday carnage to justice have gone unfulfilled. Those who are desperately seeking justice pinned their hopes on the current leaders who vowed to trace and prosecute the terror masterminds expeditiously.
The present-day leaders, too, have chosen to remain silent on their promise at issue; they are impervious to calls for justice, just like their predecessors. Let fulfilling their pledge to serve justice for the Easter Sunday terror victims be one of their Christmas resolutions.
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