Excise Dept. comes under fire for failure to collect Rs. 1.1 b in taxes from liquor manufacturers

• Reveals total tax arrears to be collected from 2023 up to 15 June 2024 amounts to 
• Rs. 1.8 b from W.M. Mendis & Co., 
• (Rs. 1.6 b) Higurana Distilleries 
• (Rs. 102 m), Wayamba Distilleries 
• (Rs. 79 m) and Synergy Company (Rs. 37 m) 
• Discloses payment agreements with companies other than W.M. Mendis have become inactive 
• Committee directs Finance Ministry to temporarily suspend licences of alcohol producers failing to pay their 2023 Excise Duty arrears
• Slams Commissioner General of Excise for inaction and avoiding Committee 
• Expresses displeasure over lenient approach towards law breaking liquor firms while taxes continue to be levied on general public

The Committee on Ways and Means has expressed strong displeasure over the Excise Department’s failure to act on recommendations to collect a total tax amount of 

Rs. 1.1 billion from liquor manufacturers for the year 2023. 

Despite instructions given on 24 April to collect the arrears by 30 June, the Department has yet to take appropriate action.

During the committee meeting held last week at the Parliament premises under the chairmanship of MP Patali Champika Ranawaka, it was revealed that there had been a lack of response from the Finance Ministry despite inquiries made by the Excise Department on 24 May regarding the contradictions in agreements for the collection of excise duty.



The committee was informed of significant tax arrears from several companies; W.M. Mendis & Co. Ltd. (Rs. 1,659 million), Higurana Distilleries (Rs. 102 million), Synergy Company (Rs. 37 million), and Wayamba Distilleries (Rs. 79 million). 

In total the arrears of taxes to be collected from 2023 up to 15 June 15 2024 amount to Rs. 1.8 billion.

The committee stressed that both Parliament and the public would be informed about the Excise Department’s failure to fulfil its responsibility. 

It was noted that payment agreements with companies, other than W.M. Mendis have become inactive and the Commissioner General of Excise was criticised for not taking proper action and avoiding the committee.

Committee Chair Ranawaka highlighted the Excise Department’s disregard for the Committee’s recommendations as disrespectful to both Parliament and the committee. 

Consequently, the Committee directed the Secretary to send a written notice to the Finance Ministry to temporarily suspend the licences of alcohol producers who fail to pay their excise duty arrears for 2023.

The committee also expressed displeasure over the Excise Department’s lenient approach towards liquor manufacturers who have not paid due excise duty, while taxes continue to be levied on the general public. 

The Committee also found fault with the Finance Ministry for not implementing recommendations from four previous Committee meetings.

Additionally, the Committee’s attention was drawn to issues unrelated to the excise duties, such as the flooding at the Kandy railway station. 

Officers stated that the drainage system at the station is insufficient, necessitating urgent maintenance and repairs. The Committee advised that proposals should be submitted to the District Coordinating Committee and attention should be drawn to the World Bank for assistance.

In addition, the Committee also investigated a petition regarding the provision of muddy water to residents of the Avissawella area by the National Water Supply and Drainage Board. 

Discussions pointed to authorised and unauthorised gem mining as the cause of the issue and a request was made for a list of licenced gem mining activities related to the Getaheththa canal from the National Gem and Jewelry Authority (NGJA).

Members of Parliament W.D.J. Seneviratne, DayasiriJayasekara, UdayanaKirindigoda and WasanthaYapaBandara also attended the committee meeting.