Lanka's excise revenue drops by LKR 7 billion

Revenue collected from excise duties on the sale of alcohol has dropped by LKR 7 billion during the first nine months, officials from the Excise department said. 

Senior officials pointed out at a recent meeting that there was no point in blaming the officers or the department for the loss in revenue as it is caused due to economic difficulties. 

Meanwhile, a top official of the Finance Ministry has severely reprimanded excise officers publicly at a meeting blaming them for their inefficiency in tax collection, a senior excise officer said. 

Excise Department officials have informed the Finance Ministry that the low-income level population tend to consume illicit liquor such as moonshine as liquor prices have been rising steadily over the last decade. 

They also noted that the dearth of knowledgeable officers on the subject at the Excise Department was one of the main reasons for poor tax collection.     

The Ministry of Finance expects to gain an additional revenue of around LKR 20-25 billion as a result of the increase in excise duty imposed on liquor. 

The Parliament recently passed the Excise (Amendment) Bill with new amendments including a decision to introduce a sticker for every bottle of arrack that was produced legally. 

According to ministry sources, this initiative would lead to a reduction in illicit liquor from hitting the market while increasing government revenue through excise duties. 

Keeping up with international standards, an alcohol volume based excise duty was introduced through the 2018 budget discarding the ad hoc duty structure that was in place before.