The Excise Department of Sri Lanka has announced plans to introduce a new, low-priced alcohol product to curb the rising consumption of illicit liquor.
Commissioner General of Excise, Udaya Kumara, explained at a recent Committee on Public Finance (COPF) meeting that the increase in alcohol prices has led many people to turn to illegal alcohol, resulting in significant tax revenue loss.
Kumara emphasized that through regulation and oversight, the government can shift consumers back to legal alcohol, thereby boosting revenue.
He also noted that targeted raids and enforcement actions over the past two months have contributed to a rise in income, not due to tax increases, but because of the shift from illegal to legal trade.
The Commissioner believes that further regulation could lead to even greater revenue growth. He also highlighted that introducing an affordable alcohol product could generate approximately Rs. 50 billion in additional income.
Kumara plans to consult his team and submit a proposal to the Ministry of Finance for consideration.
Excise Officer Jayantha Bandara added that hard liquor consumption has been declining since 2022. He explained that the new alcohol product aims to reduce the harm caused by harmful substances commonly found in illegal alcohol.
The first phase of the plan involves introducing a 180-milliliter bottle, which is expected to generate Rs. 50 billion to Rs. 100 billion in tax revenue.
