(Prime Minister’s Media Division)
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Excise Department grapples with billions of rupees in lost tax revenue

Due to ban on liquor sales during travel restrictions
by Suresh Perera
The continued prohibition on liquor sales due to existing travel restrictions in the country has dealt a crippling blow to the Excise Department with the loss of tax revenue exceeding a whopping Rs. 10 billion (Rs. 10,000 million) so far.
“We have been deprived of around Rs. 600 million per day in excise duties”, says M. J. Gunasiri, Commissioner-General of Excise.
Since the sale of alcohol was banned with the indefinite closure of all licensed liquor sales outlets (commonly called ‘wine stores), taverns, clubs and hotels on May 21, 2021, the loss in terms of tax income to the Excise Department for the past 18 days (up to June 8) has shot up to more than Rs. 10 billion, he said.
Excise tax on alcoholic beverages is a key source of government income, accounting for around 7% of tax revenue. The Treasury reported tax revenues of 944.4 billion for the seven months in 2019 up from Rs. 670.4 billion in the corresponding period the previous year, according to latest figures available.
Asked about the loss of tax revenue from tobacco sales, Gunasiri said the income earned by the Excise Department from this segment is marginal as the Finance Ministry absorbs the bulk of it.
“We have garnered only Rs. 35 million from tobacco sales so far this year”, he said.
With legal alcoholic beverages shut out, the illicit hooch business is thriving, the Excise Department chief remarked. “Some people have even resorted to distilling spirits at home”.
This is a dangerous trend as the illegal brew can even poison tipplers due to lack of standardization, he cautioned. “People should not jeopardize their lives by drinking such unsafe concoctions”.
Asked whether legal booze cannot be allowed to be ordered online for home delivery on a restricted basis to overcome the problem of risky ‘home-made alcohol’ to some extent, Gunasiri opined that sales cannot be done selectively.
“Such a move will also come under heavy flak though it’s fact that the illicit moonshine trade is cashing in on the situation in a big way”, he pointed out.
With legally produced products no longer available, ‘kasippu’ (illicit hooch) distillers are having a field day, trade sources asserted. “With the police tied down to implementing Covid-19 related measures and enforcing travel restrictions, there’s hardly the time and space for raids to round them up”.
Local liquor was also available in the blackmarket at exorbitant prices – a 750ml bottle of Extra Special Arrack (commonly called ‘gal’), usually sold at Rs. 1,600, had spiked to Rs. 5,000 over the past few days. The pricing started at around Rs. 2,500 per bottle, but shot up as legal products remained out of bounds with the extension of the travel restrictions, the sources said.
The Excise Department subsequently sealed all liquor outlets in a bid to prevent the ‘leak’ of available stocks.
“It’s true that many people have turned to rotgut as there is no option”, Gunasiri said.
On Tuesday, the Excise Department granted permission to facilitate the sale of liquor in “Safe and Secure Level 1 Hotels” during the travel restrictions.
Asked what “Level 1 Hotels” meant, the Excise Department boss explained that they represented Tourist Board approved star class properties which accommodate foreign visitors.
There are foreigners arriving in Sri Lanka under air transport bubbles and they can be served liquor if they are in-house guests of a star class hotel, he elaborated.
“This does not mean that anybody can walk into the bar of a hotel coming under the specified category and consume liquor”, he clarified.
This facility was granted to give foreigners access to liquor during their stay in Sri Lanka, Gunasiri further said.
Asked for a clarification on the legally specified quantum of alcohol an individual can have in his possession in terms of the amended regulations, he outlined that its 7.5 litres of any brand of local liquor (ten 750ml bottles) and 80 litres of foreign liquor, irrespective of whether its whisky, gin, brandy, rum, vodka, beer etc. as long as they are imported products.
The specified quantities are strictly for personal use and cannot be sold to a third party, he stressed.
Gunasiri served as the Deputy Commissioner General of the Inland Revenue Department prior to his appointment to head the Excise Department.
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Strengthen law enforcement processes to protect public law and order without any external influence – President

President Anura Kumara Disanayake instructed police chiefs of the Southern Province to carry out their duties without any influence. The President further stated that his government would facilitate this process by ensuring political authority provides the necessary assistance.
President Disanayake made these remarks during a discussion held today (18) at the Presidential Secretariat with police chiefs of the Southern Province.
The President emphasized that everyone must abide by the country’s fundamental laws and stated that enforcing these laws is the responsibility of the police department.
During the discussion, police chiefs of the Southern Province briefed the President on reports related to organized crimes and drug-related offenses. In response, President Disanayake instructed officials to take all necessary measures swiftly to combat crimes.
He also directed the officers to strengthen law enforcement processes to protect public law and order without any external influence.
Minister of Public Security and Parliamentary Affairs, Ananda Wijepala; Deputy Minister of Public Security and Parliamentary Affairs, Attorney-at-Law Sunil Watagala; Acting Inspector General of Police, Priyantha Weerasooriya; and several Southern Province police chiefs were also present at the discussion.
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President holds discussions with Western Province Police chiefs

President Anura Kumara Disanayake stated that steps will be taken to provide the necessary facilities to eliminate organized crime and drug abuse, as well as to introduce new legislation.
The President made these remarks during a discussion held today (18) at the Presidential Secretariat with the police chiefs of the Western Province.
He emphasized that maintaining the rule of law is a key responsibility of the Police Department.
President Anura Kumara Disanayake further stated that a just society cannot be established in Sri Lanka without ensuring the supremacy of the rule of law.
Minister of Public Security and Parliamentary Affairs, Ananda Wijepala; Deputy Minister of Public Security and Parliamentary Affairs, Attorney-at-Law Sunil Watagala; Secretary to the Ministry of Public Security, Ravi Seneviratne; Acting Inspector General of Police, Priyantha Weerasooriya; and several Western Province police chiefs were also present at the event.
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