Sri Lanka to regulate hooch to plug tax gaps
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.