Sri Lanka’s Alcohol Excise Revenue Plummets

Sri Lanka’s Commissioner General of Excise, M J Gunasiri, has announced that excise revenues from arrack and other alcoholic beverages have plummeted by 40%.

This follows a spate of unprecedented retail price increases that have placed legal products beyond the reach of consumers. The increases arose from skyrocketing operational costs incurred by alcohol manufacturers, who subsequently passed some of these costs onto consumers.

Added to this were a number of tax increases, including VAT and excise hikes, which pushed the prices up even further.

Alcohol and cigarette prices in Sri Lanka were already among the highest in the world, according to World Bank data, but with these latest increases – together with further excise hikes possibly in the pipeline – many Sri Lankans who want to continue smoking and drinking have no other option but to go illicit.

This is particularly concerning in a country where 80% of alcohol consumption is already illicit, according to the World Health Organisation.