Sri Lanka to reg­u­late hooch to plug tax gaps

Daily Mirror (Sri Lanka) - - PROVINCIAL -

Sri Lanka is to start reg­u­lat­ing the tra­di­tional home-brewed al­co­hol known lo­cally as toddy in an ef­fort to in­crease its tax rev­enues, a govern­ment spokesman said this week.

Toddy, a pop­u­lar al­co­holic drink made from the fer­mented sap of the co­conut flower, is not sub­ject to taxes.

But it is also used to man­u­fac­ture a stronger drink known as ar­rack, which is about 35 per­cent al­co­hol by vol­ume and which is taxed. Govern­ment spokesman Gayan­tha Karunathi­laka said an eas­ing of reg­u­la­tions on the in­dus­try six years ago had led to an in­crease in pro­duc­tion, but tax rev­enues had de­clined be­cause there was no mech­a­nism for mon­i­tor­ing pro­duc­tion.

He said the govern­ment would in­tro­duce new laws and start mon­i­tor­ing the quan­tity of toddy har­vested in Sri Lanka, which heav­ily taxes al­co­hol.

“Un­der the new laws, there will be a reg­u­la­tory mech­a­nism to mon­i­tor toddy pro­duc­tion and col­lect taxes ac­cord­ingly,” Karunathi­laka said.

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