News

Illicit artificial toddy trade deprives govt. of Rs. 80 billion in revenue annually

Published

5 years ago

2020/12/13

Sahan Weerasooriya

State Minister promises remedial action

By Saman Indrajith

One of the topics that kept reverberating throughout the budget debate that ended in parliament last Wednesday was the drain of excise revenue as a result of loopholes in the tax net by artificial toddy manufacturing businessmen.

Various facets of the issue were raised by SJB Matara District MP Buddhika Pathirana during the question time on three separate days highlighting the severity of the damage inflicted on the national economy by tax evading toddy businessmen who deprive the government coffers of a whopping Rs. 80 billion annually.

Following the disclosure by MP Pathriana, State Minister of Money & Capital Market and State Enterprise Reforms Ajith Nivard Cabraal promised remedial action.

Commissioner-General of Excise, Ariyadasa Bodaragama, acknowledged that there exists a tax leakage but he was wary of the figure of Rs. 80 billion.

Bodaragama is due to retire at the end of the month. Deputy Commissioner-General of the Inland Revenue Department, M. J. Gunasiri has been named as his successor.

Challenges before Gunasiri, as the new Excise Commissioner-General, are enormous, and whether he would be able to help Minister Cabraal deliver on his promise remains to be seen.

As Gunasiri earlier served as Deputy Commissioner-General Tax Administration (Corporate Small Entities & Non Corporate Sector) at the Inland Revenue Department, his expertise may be useful to remedy the situation. However, he has only three more months of service before his retirement. Unless he is given a service extension, the task of finding solutions to the tax evasion issue raised by Pathirana will probably have to wait till another Commissioner-General is appointed.

Pathirana told The Sunday Island that the government coffer is bound to lose over Rs. 80 billion a year due to tax evasion by artificial toddy manufacturers and the ramifications to the national economy are more acute if the health cost is also taken into account.

“We have seen many instances of serious health problems that illicit brewers caused to the people. Artificial toddy is produced by mixing urea, ammonia, nickel cadmium of old batteries and sugar. This harmful brew is sold at liquor shops and used for manufacturing ‘coconut arrack’ and vinegar.

“Suppose we overlook tipplers who consume the toxic brew knowingly or unknowingly, what about innocent consumers who buy vinegar? In Sri Lankan food culture, vinegar is an integral part. Imagine the number of people who get ill because they consume vinegar made of artificial toddy,” the MP said.

“The artificial toddy industry is well-rooted in coastal areas in the south. If one checks the number of trees tapped and the number of liters of toddy being sold, it is a very simple calculation to understand how much artificial toddy is being consumed. Only around one and a half litres of toddy could be tapped from a single coconut palm. As per reports of coconut researchers, the amount could vary slightly due to factors such as climate, humidity and season. The amount being sold by license holders varies from the actual amount extracted from palms. A difference is in the region of 60,000-70,000 litres. So, it is obvious that toddy comes from other sources”, he noted.

There have been raids by police and STF but toddy businessmen continue to ply their trade because the police cannot take the culprits before courts as per Sections 49, 50 and 52 of the Excise Ordinance. They have to hand over the suspects and the equipment to excise officers, who most of the time do not produce the suspects in courts but release them after filing a Technical Crime Report (TCR), the parliamentarian further said.

“Under the TCR, the racketeers only have to pay a small sum by way of a composition fee. The TCR is actually one of the loopholes these businessmen get out so easily. I pointed out all these to the government. I hope Minister Cabraal will act as promised. I also pointed out to him that there are not only excise officers but some finance ministry officials who benefit from the artificial toddy business. I hope and pray that the minister will be able to remedy this situation,” Pathirana added.

President of the Nawa Sinhala Rawaya, Ven Magalkande Sudattha Thera said the illicit toddy industry is thriving despite isolated raids. The police and the STF conducted successful raids in many areas in the recent past. Thereafter, the police hand over the suspects and equipment to the Excise Department for legal action. Excise Department officials file a TCR and release them on a composition fee.

Many illicit toddy producers have licences for toddy tapping. So finding sugar, ammonia, yeast, batteries in toddy amounts to only a technical error; it becomes a technical crime if they suspect that the manufacturer had purposefully mixed them with toddy or produced toddy using them as ingredients. During a recent raid, the police found three bags containing 25 kilos of ammonia to be used to produce toddy. How could the government ensure public safety when poison is being sold in bottles in the name of toddy, the prelate asked.

President of the consumer watchdog National Movement for Consumer Rights Protection, Ranjith Withanage said that old mobile phone batteries were also being used in the fermentation process of artificial toddy.

He said a countrywide survey conducted by his organisation revealed that discarded mobile phone batteries and power banks and chemicals such as urea were used to produce artificial toddy.

“We have information that such toddy is being sold to produce coconut arrack and vinegar. Arrack and vinegar made from artificial toddy were sold in the market while those responsible for preventing consumers from such harmful products have done nothing so far to raid shops and places that sold them”, he asserted.

Withanage said that local arrack and vinegar made from artificial toddy have been identified as one of the main causes of chronic kidney diseases.

He further said the government loses over Rs 180 billion a year due to the illicit liquor and tobacco (Rs. 100 billion on illicit liquor and tobacco and Rs. 80 billion on illicit toddy).

“We expected the government to present budget proposals to counter the loss of revenue, but there was none”, he added.

Excise Department spokesman, Deputy Commissioner, Kapila Kumarasinghe said there were instances where toddy manufacturers were caught for using illegal methods to increase the volume of alcohol. Water, sugar, urea, yeast and salt are being used to get a high content of ammonia in toddy.

He said that toddy is being sold in taverns as fresh toddy and bottled toddy after pasteurizing so that they could be kept for one to two weeks. Toddy is also being sold for the production of vinegar. If toddy with additives are used to distill arrack, the machines extract only the alcohol and the additives are discarded as ‘spent-wash’. The distilling machines are calibrated only to extract alcohol, and not other elements in the raw materials.

In the most popular brands of arrack sold in the market, there is only three percent toddy and 97 percent water, ethanol and rectified spirits. Adding alien items during production is illegal,” he warned, adding that the Excise Department with its available resources is fighting hard not only against the artificial toddy industry but also other narcotics and drugs, he said.

Excise Commissioner General Bodaragama acknowledged there was a significant loss of excise revenue due to various tactics used by toddy manufacturers.

He said that there is a leakage of tax revenue but assured that he was certain that it could not be Rs. 80 billion.

State Minister of Money & Capital Market and State Enterprise Reforms Ajith Nivard Cabraal told The Sunday Island that Pathirana had raised this issue several times in Parliament and he had already instructed Secretary to the Ministry of Finance and the Excise Department officers to submit a comprehensive report to him on the matter.

The toddy industry extends from Kalutara, Gampaha, Puttalam, Badulla, Moneragala, Hambantota, Anuradhapura to the Northern and Eastern provinces. As at Dec. 31, 2019, there were 3,094 licensed toddy tappers and 32 licensed toddy producers in the country.

“There could be many more engaged in supportive services for their livelihood but we have no exact details on them”, he noted.

“Pathirana made constructive suggestions and we took note of them. We are thankful to his efforts and are determined to remedy the situation. I intend to study this matter first with my officials. I assure you that this would be studied properly and necessary action initiated”, the Minister assured.

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News

India A beat Sri Lanka A by 8 runs in thriller

Published

5 hours ago

2026/06/9

Priyan

Sahan Arachchige played a crucial knock for Sri Lanka A

India A beat Sri Lanka A by eight runs in the first match of the tri series being played at Dambulla.

Batting first India A powered by almost a run a ball century by Rutraj Gaikwad [101 off 114 balls] and a half ton from Tilak Varma [60] posted 277/6. Mohammed Shiraz captured 2 wickets including the wicket of India’s 15 year old batting sensation Vaibhav Sooriyawanshi who was caught by Sahan Arachchige for 14.

In the chase Sri Lanka were in the hunt with 40 plus scores from Niroshan Dikwella, Avishka Fernando and Saddera Samarawickrema and a 72 ball 74 from Shan Arachchige but lost the momentum after Arachchige fell with the score on 262. Sri Lanka A fall short by 8 runs losing their last three wickets for the addition of seven runs !

SCORES:
INDIA A 277/6 in 50 overs [Priyansh Arya 32, Rutraj Gaikwad 101, Tilak Varma 60; Mohamed Shiraz 2-67] beat SRI LANKA A 269 in 48.5 overs [Niroshan Dickwella 47, Avishka Fernando 45, Sadeera Samarawickrama 46, Sahan Arachchige 74; Arshad Khan 2-24, Anukul Roy 2-49, Ayush Badoni 2-46, Vipraj Nigam 2-46] by 8 runs

Vaibhav Sooryavanshi in action on India A debut•Jun 09, 2026 [SLC]

Mohamed Shiraz celebrates the wicket of Vaibhav Sooryavanshi [SLC]

News

Food Policy and Security Committee meets

Published

8 hours ago

2026/06/9

Priyan

A meeting of the Food Policy and Security Committee was held on Monday (08) afternoon at the Presidential Secretariat under the co-chairmanship of Minister of Agriculture, Livestock, Land and Irrigation, Lal Kantha and Minister of Trade, Commerce, Food Security and Cooperative Development, Wasantha Samarasinghe.

The meeting extensively discussed the measures that should be taken and the preparedness required to mitigate any potential impacts on Sri Lanka arising from the anticipated global El Niño phenomenon.

Particular attention was given to the possible effects of El Niño on the agricultural sector. Discussions also focused on the need to ensure adequate water storage in reservoirs for the forthcoming Yala season and to safeguard drinking water supplies. Minister Wasantha Samarasinghe instructed officials to obtain the views and recommendations of the relevant institutions on these matters.

It was further decided to convene a special meeting of the Food Policy and Security Committee in the near future to continue discussions on the issue. Relevant line agencies, including the Ministry of Agriculture, the Department of Agriculture, the Mahaweli Authority and the Department of Irrigation, were instructed to prepare and submit comprehensive plans outlining measures to address the potential impacts of the El Niño phenomenon.

The Ministers noted that, just as the country had successfully managed challenges arising from Cyclone Ditwah and the conflict situation in the Middle East, plans were already in place to effectively manage this potential global challenge. They emphasised that the Government was giving special attention to the matter.

Minister Wasantha Samarasinghe further pointed out that natural disasters cannot be predicted with certainty and stressed the importance of developing contingency plans in advance to respond effectively to any eventuality.

Among those present were Senior Additional Secretary to the President Kapila Janaka Bandara, Secretary to the Ministry of Public Administration, Provincial Councils and Local Government, S. Aloka Bandara, Secretary to the Ministry of Health and Mass Media, Dr. Anil Jasinghe, Director General of Health Services Dr. Asela Gunawardena, Acting Director General of the Department of Meteorology, A. L. K. Wijemannage, Director General of the Department of Agriculture W. A. R. T. Wickramarachchi and other members of the Food Policy and Security Committee.

President’s Media Division (PMD)

News

PM launches the first phase of the National Education Management Information System

Published

17 hours ago

2026/06/9

Priyan

Prime Minister and Minister of Education, Higher Education and Vocational Education, Dr. Harini Amarasuriya, stated that as a government committed to ensuring the future of the nation’s children, it is essential to establish an education system in which every child can equally experience quality education. The Prime Minister emphasized that decisions must be made based on accurate data, sound policies, and technological evidence in order to achieve this goal.

The Prime Minister made these remarks while attending the official launch of the first phase of the Human Resources Module of the National Education Management Information System (NEMIS) and the pilot project of the e-Thaksalawa Learning Management System (LMS), held at Temple Trees on Saturday [6th of June 2026].

The National Education Management Information System has been developed to enhance the efficiency and effectiveness of human resource management and administration, which are among the five key pillars of the ongoing education reforms.

Previously, each province operated its own independent information systems, and through this new platform, it is expected to manage all information relating to both national and provincial schools under a single integrated system. Accordingly, the first phase, the Human Resources Module, was officially launched. Under this initial module, teacher transfers in the provinces of Sabaragamuwa, Western, Southern, and North Western will be managed through the system, with plans to expand it island-wide in due course.

The remaining modules to be introduced in the future are designed to facilitate comprehensive human resource management for all academic staff in schools.

This initiative has been implemented through the collaborative efforts of the Prime Minister’s Office, the Ministry of Education, Higher Education and Vocational Education, the Ministry of Digital Economy, the Task Force on Digital Transformation in Education, provincial and zonal education authorities, technical teams, and the Sri Lanka Air Force.

Simultaneously, the pilot project of the e-Thaksalawa Learning Management System (LMS) was also launched, aiming to expand digital learning opportunities and enhance the teaching, learning, and assessment processes for students.

Addressing the occasion, Prime Minister Dr. Harini Amarasuriya stated:

“Instead of allowing different sectors of the education system to function in isolation, we are integrating educational administration, the delivery of education, and educational content into a one framework. What we have embarked upon is by no means a minor undertaking.

Digitalisation is importance to our government. We must evolve and move forward with rapidly changing world. We believe that digitalisation is essential in order to deliver the public services more efficiently and transparently. In particular, the education reforms we will implement in the future require accurate data. Through the National Education Management Information System, we will be able to obtain reliable data while ensuring transparency and quality in education.

All national schools will be incorporated into this system in the near future. Teacher data from several provincial schools have already been entered. Through this platform, we expect to manage teacher recruitment, transfers, promotions, and other services related to the education sector in a transparent and efficient manner.

When digitalising public services, we must also nurture citizens with the knowledge and skills to use them. The primary responsibility for this lies with the education sector. That is why we have planned to build human capital through the e-Thaksalawa Learning Management System.

Digitalisation is not a substitute for teachers. Education is fundamentally based on human relationship. No matter how much technology is available in classrooms, learning does not happen automatically. It is the teacher who engages directly with students. Therefore, digital technology should serve as a tool that empowers teachers and further enhances their importance.

By using digitalisation, we intend to address key challenges such as providing high-quality education to under-resourced schools, ensuring that every school benefits from the expertise of capable teachers, and creating educational opportunities for children with special needs. Our vision is to use digitalisation to nurture humane, enlightened citizens who are prepared for the future.

During the event, commemorative plaques were presented by the Prime Minister to officials representing the Sabaragamuwa, Eastern, and Uva Provinces, as well as to officers of the Sri Lanka Air Force, in recognition of their contribution to the development of the first phase of the National Education Management Information System.

The occasion was attended by the Deputy Minister of Digital Economy Eranga Weeraratne, Secretary to the Prime Minister Pradeep Saputhanthri, Secretary to the Ministry of Education, Higher Education and Vocational Education Nalaka Kaluwewa, and Secretary to the Ministry of Digital Economy Waruna Sri Dhanapala, and Chief Secretaries of Provincial Councils, the Commander of the Sri Lanka Air Force, Provincial Secretaries of Education, provincial education authorities, senior officials representing the Prime Minister’s Office, the Ministry of Digital Economy and the Ministry of Education, as well as members of the Task Force on the Digital Transformation of Education and senior officers of the Sri Lanka Air Force.

[Prime Minister’s Media Division]