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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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Shocking 17,500 video clips of Lankan children being sexually abused



By Norman Palihawadane

There were over 17,500 video clips of Sri Lankan children being sexually abused, on the Internet and action had been taken to arrest those responsible, Police Spokesman Senior DIG Ajith Rohana said yesterday. The Sri Lanka Police had sought the assistance of international law enforcement agencies and the Internet service providers to track down the persons involved in uploading those video clips and child sex trafficking via internet, the SDIG said.

Crimes against children in Sri Lanka were rising at an alarming speed, the SDIG said.

The police would conduct a special awareness programme together with the National Child Protection Authority to curb the alarming trend, he said.

The first programme was held recently in Nuwara Eliya where it especially focused apprising police officers attached to that Division.

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Private buses to insist that inter-provincial commuters carry proof of vaccination?



By Rathindra Kuruwita

A limited number of Sri Lanka Transport Board (SLTB) and National Transport Commission (NTC) buses and trains would maintain limited inter- provincial operation from 01 August, State Minister of Transport, Dilum Amunugma said.

The State Minister said that certified documents issued by the respective depot superintendents and the letters of approval by the NTC were mandatory, he added.

“The buses and trains will be permitted to operate only in the morning and in the evening for office workers,” Amunugma said.

The State Minister added that passengers should behave responsibly when using the inter-provincial transport services and understand that those services were only for commuters engaged in essential services.

“The Delta variant is spreading rapidly. If one infected passenger travels in a bus, all other commuters will contract it” he warned.

The Lanka Private Bus Owners’ Association (LPBOA) has decided to make proof of vaccination compulsory for inter provincial travel from 01 August

LPBOA President Gemunu Wijeratne said they had written to the President and Transport Minister asking for permission to enforce it.

Wijeratne said that all bus operators in the Western Province should ensure they were inoculated by August 15.



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TNA Leader complains against appointing Sinhala officers to Tamil areas



By Dinasena Ratugamage

Tamil National Alliance (TNA) Leader, R. Sampanthan had written to President Gotabaya Rajapaksa and Prime Minister, Mahinda Rajapaksa, objecting to the appointment of Sinhala government officers to the Northern Province, former TNA MP Mavai Senathirajah told journalists on Wednesday (28.)

The President and the Prime Minister are appointing officials violating democratic principles, Senathirajah said after a meeting of party activists at Karachchi Divisional Secretariat Office, Kilinochchi.

“A lot of Sinhalese are appointed to the North and the East. They must appoint Tamils. These appointments undermine our struggle for a just language policy,” he said.

Senathirajah said that it was customary to appoint Tamil officers to Tamil majority areas. However, this tradition was being violated increasingly in recent times, the former MP said.

“The TNA has nothing against Sinhala government officers. However, appointing Sinhala state officers to majority Tamil areas is a great injustice to the people. So, our leader has written to the President and the Prime Minister asking them to stop this practice,” he said.

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