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Sri Lanka liquor demand down by 30 percent but revenue up

Sri Lankans demand for liquor has decreased by about 30percent due to the recent increase in the price of liquor and the decrease in the income of the people of the country,. the Committee on Public Finance (COPF) revealed.

This was transpired at a recent meeting of the Committee on Public Finance chaired by Member of Parliament ighted Anura Priyadarshana Yapa.

Officials representing several institutions were contacted online to discuss plans to increase government revenue and their current status.

Accordingly, officials representing the Ministry of Finance, Economic Stabilization and National Policies, the Inland Revenue Department, the Sri Lanka Excise Department and the Sri Lanka Customs were contacted online.

The officials said that there were several problems in the Sri Lanka Excise Department reaching the target revenue due to the limited quantity of ethanol available for the production of liquor, limited number of diesel and fuel and distribution problems.

They also pointed out that the demand for alcohol has decreased by about 30percent due to the increase in the price of alcohol and the economic hardships faced by the people.

It was also stated that due to the sudden price hike there is a tendency to increase the production of illicit liquor.

Sri Lanka’s Excise Department is in the process of enhancing revenue collection and strengthening tax administration with the aim of contributing much needed cash for state coffers in the severe economic crisis, top official of the department said.

It has collected Rs. 80 billion up now this year from the set target of Rs.180 billion even during the period of economic difficulty tiding over the present crisis, Commissioner General of Excise M.J. Gunasiri disclosed.

The Department has been able to increase its revenue to Rs.140 billion in 2021 from Rs.121 billion in 2020; he said adding that the tax administration has been strengthened.

The Excise Department chief stated that the increase in excise duty which was proposed in the 2022 budget is effective from today November 13 2021.

The government has decided to withdraw the special Goods and Services Tax (GST) aimed at simplifying the existing tax structure and consolidating several taxes as a single tax following the Supreme Court’s decision of requiring a two-third majority and referendum to enact it as a law, Finance Ministry sources said.

The Court observed that several clauses of the bill are inconsistent with some of the articles of the country’s constitution.

The Special GST consolidates several taxes on liquor, cigarettes, telecommunications, betting and gaming and vehicles. The Attorney General had cleared the draft law.

This legal issue has prompted the Finance Ministry find an option to re-introduce the SGST and one of the options is to withdraw the tax and allow the previous taxation system with some revisions to relevant taxes to continue,a senior official said

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