By: Staff Writer
August 12, Colombo (LNW): The Excise Department will introduce a new safety sticker for liquor bottles starting October 1. Commissioner General of Excise, M. J. Gunasiri, announced this update, citing the need to address the limitations of the current system.
This change comes as the department aims to meet its highest-ever annual revenue target of Rs. 232 billion for 2024, a significant increase of Rs. 60 billion from the previous year’s income of Rs. 172 billion.
n 2022, the department generated Rs. 165 billion, with the production of absolute alcohol reaching 432 million liters. However, production dropped to 351 million liters in 2023 due to rising alcohol prices and decreasing demand.
Gunasiri highlighted that the decrease in alcohol consumption is primarily due to several factors, including a 14% increase in excise duty on alcohol, an 18% VAT, and a 2.5% hike in the social security contribution levy.
Additionally, higher raw material costs, fuel shortages, lockdowns, economic hardships, inflation, and alcohol price hikes since early 2022 have contributed to the drop in liquor demand.
In January 2024, liquor manufacturers responded to the economic challenges by raising the prices of all liquor products.
The price increases for Distilleries Company of Sri Lanka (DCSL) brands include Rs. 90 for 750ml bottles, Rs. 50 for 375ml, and Rs. 20 for 180ml. Sri Lanka’s annual liquor production is estimated to be between 540 and 600 million bottles, with over 5,000 liquor permit holders and 23 registered distilleries.
The hike in liquor prices has led to a 300% increase in the consumption of illicit liquor and other dangerous drugs like ice, cocaine, and marijuana. Gunasiri noted that not paying taxes genuinely to the state is akin to participating in illicit liquor manufacturing.
Gunasiri also addressed the recent revision of annual excise license fees, which took effect on January 12. Following objections from liquor distillers and associations, the department made another revision, effective February 1, to mitigate the impact on the already struggling industry.
The annual excise license fees, including those for taverns and liquor retail outlets, were revised. For example, the annual tavern license fee was reduced from Rs. 2.5 million to Rs. 2 million, and the license fee for bottling coconut toddy was decreased from Rs. 10 million to Rs. 1.5 million.
Similarly, the fee for bottling palmyra toddy was reduced from Rs. 10 million to Rs. 500,000, and the license fee for manufacturing vinegar was cut from Rs. 2.5 million to Rs. 500,000.
Retail license fees for liquor in municipal areas were also reduced from Rs. 15 million to Rs. 1 million, while those in urban council areas were lowered from Rs. 12.5 million to Rs. 800,000.
In other regions, the license fee was reduced from Rs. 10 million to Rs. 600,000. These adjustments were made in response to industry appeals and aim to balance government revenue needs with the challenges faced by liquor manufacturers.
