Sri Lanka’s Excise Department (ED) has renewed a strategy to deal with excise duty evasion by some local companies, a senior department official said. The ED has cracked down on smuggled ethanol which was used to produce hard liquor without paying taxes depriving the government of excise duty revenue amounting to millions of rupees, he [...]

The Sunday Times Sri Lanka

Excise Department renews strategy to deal with tax evasion

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Sri Lanka’s Excise Department (ED) has renewed a strategy to deal with excise duty evasion by some local companies, a senior department official said.

The ED has cracked down on smuggled ethanol which was used to produce hard liquor without paying taxes depriving the government of excise duty revenue amounting to millions of rupees, he disclosed.

A report released by the Parliamentary Public Accounts Committee (PAC) recently revealed that three liquor companies have defrauded excise duty amounting to over Rs.1.45 billion outstanding as at June 30, 2015 along with a late fee of 3 per cent.

A case is pending against three companies, Wayamba Distilleries, Global Blenders and McCallum Breweries and recoveries have been made from one company while the other two companies have agreed to reach a consensus with the ED, another official told the Business Times.

He noted that the department has recorded a revenue of Rs.99 billion during the past 10-month period and that it can achieve the target of Rs.125 billion by the end of this year as the excise officers are expected to collect excise duty on an average of Rs. 11 billion per month.

Under the renewed strategy of the department, an automated link is to be established between the statistics unit of the department and all excise centres.   The department will be implementing a scheme of issuing licences and collecting excise revenue automatically, he said, adding that a mechanism is to be devised to obtain updated data from the license unit and excise centres.

A committee has been appointed to look into these matters, he pointed out. The PAC has found that the inspection of hotels approved by the Tourist Promotion Bureau by the ED officers was unsatisfactory. This was the result of a staff grade officer shortage at the department, he disclosed.   Preliminary work is now underway on the modernisation of the computer data system of the department and the establishment of a link between the Customs Department and Inland Revenue Department, he added.  -(Bandula)   

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