High tax lessens cheer to Govt. coffers but no respite in price

Thursday, 25 May 2023 03:18 -     - {{hitsCtrl.values.hits}}

State Minister of Finance Ranjith Siyambalapitiya told Parliament that despite projections the Government would fall short of its excise revenue target by 30% there will be revision to the tax on alcohol products. 

Siyambalapitiya told the house that following the price increase in January with new excise tax by over 20%, excise revenue from alcohol sales had dropped 7.4%. March, which is usually a high volume month, had seen a dip in production this year of almost 40%.

The State Minister said it is anticipated that some products can maintain volumes despite price increases, and alcohol had been listed as one of them, but the recent events had proven this theory wrong. 

He also noted that whilst it is good to reduce alcohol consumption, it has been observed that consumers have turned to cheaper illegal alternatives, and therefore a discussion has begun on finding ways to tackle this problem, without reducing prices. He noted in the current situation the Government has lost revenue, but consumers continue to drink unregulated product that can pose further burdens to the economy. 

The Minister said prices of all goods have increased according to inflation and the Government has no intention to provide any exceptions to the alcohol industry.