Government losing estimated Rs.15bn monthly tax revenue due to alcohol ban

• The decision to shut down bars and liquor shops was aimed at promoting social distancing 
• Home breweries popping up across the country
• Excise Dept. says many unaware of the laws prohibiting alcohol promotion in the country

By Nishel Fernando 
The government is losing estimated Rs.15 billion monthly tax revenue due to the island-wide ban on the manufacture and sale of liquor while illicit liquor trade gaining ground with home breweries popping up across 
the country.

The government on March 21 ordered to shut all bars and liquor shops as a measure to promote social distancing to curb the spread of COVID-19 in the country. 

The ban was temporarily lifted on Monday in low-risk districts. However, it was re-imposed on the following day as large crowds flocked to bars and liquor shops neglecting social distancing guidelines.
 

Deputy Commissioner of Excise, Kapila Kumarasinghe said the government is losing an estimated Rs.500 million daily or Rs.15 billion monthly in tax revenue due to the ban. 

Despite the ban, alcohol is being sold at four times the normal price in the black market. However, Kumarasinghe suspects that there could be harmful substances in these liquors as the stocks of legal liquor are not in the market with production not allowed.  

“Many in Sri Lanka tend to believe that a high price tag assures high quality. However, nobody could guarantee the substances in these liquors,” he added.

Due to excessive prices in the black market, he noted that many have resorted to illicit liquor by setting up small units to distil spirits in their own homes and some are distributing these spirits within their neighbourhoods.

Based on various reports, the Excise Department stated that a bottle of local moonshine is now being sold above Rs.2, 000, which is slightly above the price of a bottle of cheap legal spirit. 

He warned that these home-brewed spirits could contain harmful substances posing significant risks to the health of individuals as much as COVID-19 health risks.

The authorities are also blaming a series of video tutorials shared on social media platforms for the recent spike in home breweries. 

Kumarasinghe pointed out that many are sharing these video tutorials without being aware of the laws prohibiting any kind of promotions of alcohol in the country.

The Excise Department with the support of the country’s Telecommunications Regulatory Commission (TRC) plans to pursue legal action against these individuals when the curfew is lifted. 

Kumarasinghe noted that so far over 5, 00o persons have been arrested with illicit liquor during the curfew period.
However, it remains a challenging task for the authorities to contain the recent spike in home breweries in the country.