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Excise Department grapples with billions of rupees in lost tax revenue

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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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GMOA warns of trade union action unless govt. urgently resolves critical issues in health sector

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Influx of substandard drugs is of particular concern

The Government Medical Officers’ Association (GMOA) has warned of renewed and intensified trade union action if the government fails to fulfil its promise to resolve the ongoing crisis in the health sector within the next few days.

GMOA Executive Committee member Dr. Prasad Colombage said his association was hopeful that commitments made by the government, including those formally stated by the Minister of Health in Parliament and recorded in the Hansard, would be implemented.

He called for urgent remedial action in view of the influx of substandard medicines into the country, patient deaths linked to such drugs, difficulties faced by doctors in prescribing medicines, and disruptions to patient care services caused by the continued migration of medical professionals. These factors, he warned, had placed patients’ lives at serious risk.

Dr. Colombage said discussions had already been held with all relevant authorities, including the President and the Minister of Health. He expressed hope that swift solutions would be forthcoming based on agreements reached at discussions. However, he cautioned that the GMOA would not hesitate to resort to strong trade union action if tangible progress was not seen in the coming days.

Meanwhile, the Federation of Medical and Civil Rights Professional Associations yesterday (01) handed over a special memorandum to President Anura Kumara Dissanayake, calling for immediate action to resolve the deepening crisis in the health sector.

Federation President, Consultant Dr. Chamal Sanjeewa, said Sri Lanka’s health system was currently facing a severe crisis and had sought an opportunity to hold discussions with the President on the matter.

The memorandum calls for the President’s direct and immediate intervention on several key issues, including the Indo–Sri Lanka health agreement, shortages of essential medicines including cancer drugs, continued allegations surrounding the administration of the Ministry of Health, reported irregularities at the National Hospital, Colombo, and the absence of an internationally accredited quality control laboratory for the National Medicines Regulatory Authority to test medicines. The Federation has also requested a meeting with the President to discuss these concerns in detail.

By Sujeewa Thathsara ✍️

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Elephant census urged as death toll nears 400

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Sri Lanka’s latest elephant census must result in immediate policy action, not remain a paper exercise, Centre for Environmental Justice (CEJ) Managing Director Dilena Pathragoda warned, as nearly 400 wild elephants have already died in 2025 alone amid escalating human–elephant conflict.

With the national elephant population estimated at around 5,879, Pathragoda said the figures would be meaningless unless they shape land-use planning, habitat protection and enforcement.

“As of mid-December, close to 397 elephants have died in 2025, mostly due to shootings, electrocution, train collisions and other human-related causes,” he told The Island. “When deaths continue at this scale, census numbers alone offer little reassurance.”

Official data show that 388 elephants died in 2024, while 2023 recorded a staggering 488 deaths, one of the highest annual tolls on record. Conservationists warn that the trend reflects systemic failure to secure habitats and elephant corridors, despite repeated warnings.

“An elephant census should not end with a headline figure,” Pathragoda said. “If these statistics do not influence development approvals, infrastructure planning and land-use decisions, they fail both elephants and rural communities.”

Elephant populations remain unevenly distributed, with higher densities in the Mahaweli, Eastern and North Western regions, while other areas face sharp declines driven by habitat fragmentation and unplanned development.

Pathragoda said recurring fatalities from gunshots, illegal electric fences, improvised explosive devices along with poisonings  and rail collisions expose the limits of short-term mitigation measures, including ad hoc fencing projects.

“The crisis is not a lack of data, but a lack of political will,” he said, calling for binding conservation policy, transparent environmental assessments and accountability at the highest level.

He urged authorities to treat elephant conservation as a national governance issue, warning that failure to act would only see future censuses record further decline of these majestic animals.

“Elephants are part of Sri Lanka’s natural heritage and economy,” Pathragoda said. “Ignoring these warning signs will come at an irreversible cost.”

By Ifham Nizam ✍️

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CTU raises questions about education reforms

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The Ministry of Education has yet to clarify whether school hours will be extended by 30 minutes from next Monday (05) under the proposed new education reforms, Ceylon Teachers’ Union (CTU) General Secretary Joseph Stalin has said.

Stalin told The Island that the Ministry should reconsider the planned reforms, warning that decisions taken without adequate study and consultation could have serious repercussions for nearly four million schoolchildren.

He said the Education Ministry had announced that education reforms would be implemented in Grades from 1 to Grade 6, but it had not said anything about the Grades above 6. This lack of clarity, he said, had created confusion among teachers, parents and students.

Stalin also noted that although learning modules had been issued, students are required to obtain photocopies based on the codes introduced in these modules. However, the Ministry had not revealed who would bear the additional financial burden arising from those costs, raising further concerns over the practical implementation of the reforms.

by Chaminda Silva ✍️

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