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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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Even four months after first jab antibodies generated by Covishield vaccine remain active – expert



By Rathindra Kuruwita

A significant amount of antibodies created by the Covishield COVID-19 vaccine remained even 16 weeks after receiving the first jab, Dr. Chandima Jeewandara of the Allergy, Immunology and Cell Biology Unit, Department of Immunology Molecular and Molecular Medicine of the University of Sri Jayewardenepura said yesterday.

“We studied this because it was a serious issue due to hundreds of thousands of people have not received the booster doses yet. Our research shows that a significant amount of antibodies remains in those who received the first dose. This is good news and I think we can give them the second dose. But we have to conduct tests.”

Dr. Jeewandara said they would soon release a report on antibodies that developed due to the Sputnik-V vaccine, and a similar report on the Moderna vaccine too would be released in a month or two.

Dr. Jeewandara said that 500 Sputnik-V recipients and 600 Moderna recipients were being studied.

Commenting on a recent study by the department on the development of antibodies by those given the Sinopharm vaccine where it was found that vaccine induced antibody responses in over 95% of individuals, similar to levels seen following natural COVID-19 illness, Dr. Jeewandara said that the study had addressed a key concern people had about Sinopharm.

“One of the biggest problems is that we have little data on Sinopharm. This study tries to fill that,” he said.

Dr. Jeewandara said that the university had started measuring efficacy and antibodies from vaccines since Sri Lanka started administering them. The first vaccine they started studying was Covishield, he said.

“Let me explain the process. We take a blood sample before vaccination. We do that to identify antibody levels before vaccination. In Sri Lanka most people who contract COVID19 don’t develop symptoms. So we do this as a baseline blood test. Then we get a second sample before the second jab is given and a third sample at a time the manufacturer recommends as the best time to check antibodies.”

In the case of Sinopharm, the third sample was taken two weeks after the second jab. The researchers look at the level of antibodies and T-cell response because they are the two main tools to fight or prevent the virus or prevent serious illness, he said. A person can either get antibodies from contracting the virus or through vaccination, Dr. Jeewandara said.

“These are not efficacy tests. Efficacy is measured in a controlled clinical trial and is based on how many people who got vaccinated developed the ‘outcome of interest’ (usually the disease) compared with how many people who got the placebo (dummy vaccine) developed the same outcome. What we did was to test antibodies but this hints at vaccine efficacy too. Immunity and protection tend to be similar in both tests.”

Dr. Jeewandara said that Sri Lanka was an interesting case study because most Sri Lankans were genetically similar and that one variant usually dominates the country. However, Sri Lanka used several vaccines, giving the country an excellent opportunity to find out what vaccine was best.

“We also studied Covishield and over 90% of people vaccinated with it had developed antibodies,” he said.

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Natural disasters affected 1,512,344 persons last year



By Rathindra Kuruwita

During 2020, 1,512,344 persons belonging to 412,520 families were affected by natural disasters and out of them 19,872 families were placed in 202 shelters, the Annual Performance Report of the State Ministry of Internal Security, Home Affairs and Disaster Management for the year 2020 has said.

The State Ministry added that 62 deaths were reported in 2020 due to natural disasters, 393 houses were completely destroyed, 30,317 houses were partially damaged, and 2,911 small and medium scale businesses were damaged.

The government spent Rs. 12.7 million to provide them with cooked meals, Rs. 18.6 million for dry rations, Rs. 5.5 million to compensate the dead, Rs. 130 million to provide them with drinking water. In total Rs. 166.8 million were spent on those affected by natural disasters in 2020.

“Based on estimates of the assessment of damages made by an assessment committee, compensation of up to a maximum of Rs. 2.5 million was paid to home appliances, and to buildings and equipment of small and medium scale business that do not exceed an annual income of Rs. 10.0 million and that are not benefited under any other insurance coverage. Further, an advance of Rs. 10,000 was also given to the victims to quickly repair the damaged houses due to natural disasters until the damage assessment is done. This money was paid through National Insurance Trust Fund and Provisions from the Treasury. Rs. 287.9 million and Rs. 320.7 million were paid from those two sources between April 2019 and December 2020,” the report said.

The report highlighted that a large number of people are being affected by dry weather and that many people suffer being unable to meet their daily drinking water needs. In 2017, 1,113,858 families were affected by dry weather, in 2018, 567,987 families were affected, and in 2019, 312,383 families were affected.

“In 2020, 364 tractor bowsers, 133 lorry bowsers and 11,936 water tanks were provided to all Districts to provide water to 310,742 affected families from drought,” the report said.

The relevant District Secretaries were also provided with Rs. 143 million in 2020 to supply drinking water to affected families.



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New guidelines for weddings soon – Health Ministry



By Rathindra Kuruwita

The Health Ministry will soon amend health guidelines on weddings after hundreds of complaints had been received on behaviour that could lead to superspreader events, a ministry spokesman said.

“We have allowed weddings to take place with 25% seating capacity or a maximum of 150 people but drinking and dancing are not permitted. We have received many complaints of drunk people and other guests dancing on fully packed dance floors. Covid-19 guidelines are not followed” he said.

Given this development the Ministry would soon amend the guidelines so certain activities can’t be carried out, he said.

Earlier yesterday General Shavendra Silva, Head of the National Operation Centre for Prevention of COVID 19 Outbreak (NOCPCO) said wedding guests were behaving irresponsibly and there was a high possibility wedding clusters emerging.

“We have set the maximum number of people who can attend a wedding at 150 but in some areas many more people attend wedding receptions. We have allowed these weddings to take place on humanitarian grounds but if people abuse freedom given to them we will all be in trouble. Over 1,500 Covid-19 cases are still reported daily.”

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