Beer industry requests government to reconsider sticker system

• Says it only adds to production cost and unlikely to increase tax revenue to govt.
• Points out beer production happens through a high-tech process, where manual intervention is not required 
• Also says production happens under 24-hour supervision of Excise Department officials
• Further points out need to rationalise taxations for sector

Sri Lanka’s largest brewer Lion Brewery (Ceylon) PLC has urged the government to reconsider the new sticker system, which has been introduced to prevent the possible excise duty leakages, as it only adds to the production cost and unlikely to increase tax revenue to the government.
The government has introduced a new foolproof sticker for beer, with the hope of regulating and preventing the probable excise duty leakages but the company argues that the system serves no purpose, as the beer production happens through a high-tech encapsulated process, where manual intervention is not required during the entire process, which makes the leakage of the product “a near impossibility”. 
“In fact, a sticker for beer is not required, as beer is a highly regulated industry and tax stickers are not applied even in countries such as Malaysia,” said new Lion Brewery Chief Executive Officer Dr. Rajiv Meewakkala. 
Reflecting the extent to which the beer production has been made near foolproof, he said the entire process could be audited with meter readings that generate the output at every production stage and the production happens under 24-hour supervision of the Excise Department officials, who stay full time at the brewery premises, observing the production line and reconciling the output. 
The stages of the production process, such as filling, carbonation and crowing, also happen within milliseconds, with no bottling occurring outside the process. 
“We remain hopeful that the government will find a more pragmatic solution to manage this challenge, so as not to put undue pressure on the industry,” Meewakkala urged. 

Further, the company also requested the government and Excise authorities to rationalise taxations for the sector, which includes the single GST in place of the Excise Duty, which remains to be introduced. 
During his first annual review of operations after taking over as Chief Executive of the company earlier this month, Meewakkala also called for a fair tax structure across industries, which would not make certain industries winners and others losers. 
Besides the Excise Duty and Value-Added Tax, the industry is also liable to pay tax at the rate of 40 percent on its profits, the rate which applies for sin industries, including alcohol and tobacco, making beer largely unaffordable to people, who then end up consuming illicit liquor, an industry which doesn’t pay taxes.