By: Staff Writer
December 27, Colombo (LNW): The Excise Department has introduced a proposal to resolve the longstanding tax arrears issue with W. M. Mendis and Co. Ltd., whose production license was recently suspended for defaulting on Rs. 5.8 billion in taxes.
Excise Commissioner General (ECG) Udaya Kumara Perera revealed that the proposal entails the company settling 50% of the arrears—amounting to Rs. 3 billion—as a prerequisite to reactivating its license.
This initiative aims to recover significant revenue for the state while also protecting the livelihoods of over 600 employees and their 1,500 dependents.
According to ECG Perera, this plan is the most pragmatic solution to address the tax default while enabling the company to resume operations. “We must balance recovering the government’s dues with safeguarding jobs and the economy.
This proposal provides a pathway for Mendis to settle its arrears and return to business while ensuring compliance going forward,” he explained.
The company, which operates three excise manufacturing licenses for its facilities in Welisara, Moragalla, and Kalkuda, has been given the opportunity to outline a repayment plan for the initial Rs. 3 billion settlement.
Once this payment is made, the license will be reactivated, and subsequent monthly renewals will be conditional on the settlement of new production taxes.
The suspension of Mendis’ license on December 4th followed repeated warnings over the past year, which the company failed to heed.
The ECG emphasized that the Department of Excise had no choice but to take this step to address the staggering tax default.
However, Perera noted that the current proposal allows the company to demonstrate its commitment to resolving the issue and moving forward in compliance with regulations.
In parallel, the Excise Department is preparing for the renewal of approximately 2,000 excise permits for 2025.
To facilitate this process, the Commissioner General has requested the Inland Revenue Department (IRD) to submit a comprehensive report on permit holders who have paid their taxes.
So far, the IRD has forwarded 1,636 applications along with tax clearance reports, with an additional 232 reports expected shortly. ECG Perera stressed that permits will only be renewed for applicants whose tax payments are verified by the IRD.
This measure aims to ensure fairness and efficiency while encouraging compliance among excise permit holders.With 4,500 excise permits required nationwide for the sale of alcoholic beverages, the tax compliance process remains a critical component of ensuring smooth operations in the sector.
The proactive steps taken by the Excise Department highlight its commitment to maintaining transparency, accountability, and economic stability in the industry.
