Govt. hikes tax on ethanol, toddy

• State Finance Minister Ranjith Siyambalapitiya expects move will generate tax revenue of Rs. 1.6 b 
• Increases toddy tax from Rs. 25 to Rs. 50 per litre as vendors failed to pass tax benefit to consumer

The Government yesterday announced that the import tax on ethanol used for manufacturing disinfectant liquids, reduced during the COVID-19 pandemic, has been increased to its previous levels. 

“With this move, the Government expects to collect tax revenue of Rs. 1.6 billion,” State Minister of Finance Ranjith Siyambalapitiya said.

At the height of COVID-19 pandemic, ethanol was imported to the country in large volumes to manufacture disinfectant liquids. Accordingly, the import tax on ethanol was reduced on two occasions on 30 April and 9 June 2020.

Separately, the Government has decided to raise the tax on toddy from Rs. 25 per litre to Rs. 50 per litre.

Justifying the move, State Minister Siyambalapitiya said the tax was hiked once again as the vendors did not pass on the reduced tax benefit to the consumers.