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Ten distillery companies default taxes worth Rs 6.9 billion in 2023

By: Staff Writer

April 02, Colombo (LNW): The Commissioner General of Excise, responding to a Right to Information Act request, disclosed that the 10 liquor companies collectively owe the government an astonishing amount exceeding Rs.6.9 billion.

The failure to collect these taxes has reportedly led to a significant impact on the national economy, causing a loss of 26 billion rupees in tax revenue in the year 2022 alone.

According to the Liquor Tax Act, companies are required to pay taxes for products within specific timeframes.

The Excise Department is also empowered to impose surcharges for unpaid taxes. Despite these provisions, the petitioners argue that companies deliberately evade payments, and the authorities are failing to enforce the law adequately.

Ten distillery companies have defaulted taxes to the tune of Rs 6.9 billion in 2023 as per the report of the Ways and Means Committee which was tabled in Parliament today.

The companies that have defaulted include W.M. Mendis & Company, Wayamba Distilleries, Wayamba Spirit, Globe Blenders, McCallum Brewery, Kalutara Cooperative Distilleries, Synergy Distilleries, Randenigala Distilleries, Hingurana Distilleries and Royal Ceylon Distilleries.

According to the directive of the Committee on Ways and Means, manufacturing and distribution of liquor by four companies who had defaulted tax, namely W.M. Mendis & Company, Finland Distilleries, Synergy Distilleries and Randeigala Distilleries, have been banned as their excise licenses expired on September 30 last year and the Excise Department has not renewed them.

However W.M. Mendis & Company, Finland Distilleries, Synergy Distilleries and Randenigala Distilleries who have agreed to pay default taxes have actually paid the first installments on November 4 2023. The four companies remitted a total of Rs 906,176,439.51 while there is an outstanding amount of Rs 332,715, 868.31

The report revealed that Wayamba Distilleries has filed a case before the Court of Appeal against the decision of the Excise Department to cancel its licenses.

The Committee has raised concerns on liquor companies such as Globe Blenders, Wayamba Spirit Stores and Kalutara Cooperatives Distilleries who have evaded paying taxes by terminating their businesses.

In a recent development, a group of social activists, led by Sanjay Mahawatta, has submitted a fundamental rights petition to the Supreme Court of Sri Lanka. “Neither the Ministry of Finance nor the Excise Department has taken action to seize the bottles of liquor with fake security tax stamps until the committee directed the Commissioner General of Exercise to begin raids to seize liquor bottles with  the fake sticker.

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