The Excise Department of Sri Lanka has announced plans to introduce a new type of alcohol at a lower price to combat the growing consumption of illicit liquor.
Commissioner General of Excise, Udaya Kumara, stated at a recent meeting of the Committee on Public Finance (COPF) that the increase in alcohol prices had led many people to resort to consuming illicit alcohol, resulting in a significant loss of tax revenue for the government.
Kumara explained that due to rising alcohol prices, many individuals have turned to illicit alcohol, a trend that has been prevalent for some time.
He emphasized, however, that through regulation and oversight, it is possible to bring consumers back to legal alcohol, thereby increasing government revenue.
He further stated, “In the past two months, we have implemented targeted raids and enforcement actions, which have helped boost our income. It was not the increase in taxes that led to this rise in revenue, but rather the shift from illegal to legal trade. As we continue to regulate the sector, we anticipate further revenue growth. Therefore, I believe that if we continue to regulate this market further, we can increase our income.”
Commissioner General Kumara also highlighted that introducing a new, affordable alcohol product could generate additional income of approximately Rs. 50 billion.
“By introducing a new alcoholic beverage that caters to consumers seeking a lower price point, we estimate that it could generate an income of approximately Rs. 50 billion. I will consult with my team to develop a proposal, which will be submitted to the Ministry of Finance for consideration.”
Additionally, Excise Officer Jayantha Bandara, speaking at the event, noted that the consumption of hard liquor has been declining annually since 2022.
He explained that the proposed new alcohol product aims to minimize the harm caused by the harmful substances typically found in illegal alcohol.
The initial phase of the plan involves introducing a 180-milliliter bottle of alcohol, which is expected to generate tax revenue ranging from Rs. 50 billion to Rs. 100 billion, according to Officer Bandara.
