Sri Lanka cracks down on illegal ethanol imports
Sri Lanka’s revenue from excise duty jumped by 123 per cent to Rs. 251.6 billion in the first seven months this year due to a state crackdown on illegal ethanol exports by reducing corruption and tax evasion, official sources revealed. The estimated loss on unpaid taxes through ethanol imports was over Rs. 60 billion per annum in the recent past while this year the Customs has already collected 73 per cent of the full-year target of excise revenue.
The much talked illegal ethanol import racket which has deprived the country of billions of rupees in tax revenue had been busted, a government official said, adding that the imported spirits was turned into hard liquor in at least three distilleries connected to politicians of the previous regime. In addition to smuggling, ethanol was also imported tax free saying it was to make perfume. Large volumes of perfume were then reported as being produced, he revealed.
As a result the monthly revenue from ethanol imports was a mere Rs. 3.4 billion during 2014. All these illegal practices have now been curbed by streamlining of revenue collection at the Customs and strengthening its fraud Preventive Directorate, he added.
According to Customs data, 15 million litres of ethanol was imported last year and 13.4 million litres during the first seven months this year. In the first six months of 2015, 54 ethanol licenses were issued by the authorities of which 38 licenses were for liquor manufacturers and others to various industries and universities.