Government reviews new Excise Act
The government will review the new Excise Act which has been drafted by amalgamating the archaic 100 year-old Excise Ordinance and Tobacco Act during the last days of the previous regime, a senior Excise Department official who wished to remain anonymous told the Business Times.
A single legal framework has been proposed under the new Act to handle the liquor and tobacco industries of Sri Lanka, he said.
The new Excise Act will include best practices at international level in expanding the excise tax base, simplify tax rates, and introduce new technologies.
The excise revenue management system will be improved with the installing of a digital system for revenue collection similar to the Revenue Administration Management Information System (RAMIS) of the Department of Inland Revenue, he disclosed.
The new Act will be presented in parliament after making necessary amendments in accordance with the new government’s national economic policy frame work, he revealed.
The Excise Department has been able to achieve the 2019 revenue target of Rs.130 billion, he said adding that they had predicted this revenue by considering provisional estimates of receipts this year as the final accounts are yet to be prepared.
The Department has earned Rs. 113.94 billion in 2018 from the levying of excise duty and tobacco tax compared to the revenue of Rs.113.26 billion in 2017.
The impact of the recent tax relief package will not impact the Excise Department’s profit and loss account, he explained.
The financial VAT which constitutes almost 15 per cent of the VAT revenue remains unchanged at 15 per cent.
The potential loss of VAT revenue from cigarettes and liquor which accounts for almost 10 per cent of the VAT revenue has already been eliminated by the upward adjustment of the Excise Duty on cigarettes and liquor, thereby recouping almost 25 per cent of the revenue loss due to the reduction of VAT rate, theFinance Ministry announced.
The department was able to achieve 49,312 detection targets rendering a higher contribution for implementing government policy in 2018.
A sum of Rs.253.63 million was collected as fines having taken legal action against 49,312 detections carried out in 2018.