Counterfeit liquor stickers cost Sri Lanka Rs. 1.2 Billion in Tax Revenue

• Loss of Rs. 2,900 from each liquor bottle with a fake sticker 

By Yohan Perera and Ajith Siriwardana

Sri Lanka’s government is grappling with a staggering loss of tax revenue, amounting to approximately Rs. 1.2 billion, caused by the proliferation of counterfeit stickers on liquor bottles, according to a comprehensive report released by a top parliamentary committee.

The report reveals that each liquor bottle sporting a fake sticker has cost the nation a significant Rs. 2,900 in tax revenue. To combat this menace, the Committee on Ways and Means initiated investigations, leading to a series of recommendations presented on August 22, 2023. In response to these recommendations, the Excise Department swiftly executed raids targeting potential culprits involved in this illicit activity.

Chairman of the Ways and Means Committee, Patali Champika Ranawaka, has proposed decisive measures to mitigate the situation. He suggested that the licences of liquor manufacturing companies be revoked, and complaints be filed with the Criminal Investigation Department under Section 27 of the Excise Act if the use of fake stickers persists.

Additionally, the Committee has called for a crackdown on liquor stores selling bottles with counterfeit stickers, urging the cancellation of their licences. To enhance efficiency and transparency, the Committee proposed the development of a mobile application (MOBILE APP) based on QR technology. This application would facilitate quick verification of liquor bottle authenticity.

In light of these recommendations, plans are underway to introduce an IT application encompassing the proposed components for the Excise Department before the close of the year.

In a recent update, the Excise Department reported to the Ways and Means Committee that they unearthed more than 44,000 liquor bottles adorned with fake stickers during inspections of 52 alcohol bottle manufacturing sites. The fines imposed on companies found with such counterfeit liquor bottles have already reached nearly 40 million rupees.