The Excise Department is under intense scrutiny due to serious allegations of corruption related to the clandestine issuance of liquor licenses and the use of counterfeit security stickers. This controversy arises despite the department reporting record revenues of Rs. 152 billion in the first nine months of this year, according to sources from the new administration.
Excise Commissioner General M.J. Gunasiri has vehemently denied the allegations, asserting that the department collected Rs. 132.7 billion in taxes by August 22, a notable increase from Rs. 106.5 billion during the same period last year.
The government has set an ambitious target of Rs. 232 billion for 2024, representing a 29.6% increase compared to the Rs. 179 billion collected in the previous year.
Despite the impressive financial results, accusations are growing that the current Commissioner General has issued liquor licenses beyond the legal limit. Industry insiders have raised concerns, prompting a group of liquor shop owners to file petitions. Consequently, the Supreme Court has issued an interim injunction to halt the issuance of new licenses.
Nevertheless, there are ongoing allegations that licenses continued to be granted despite the court’s order. The Supreme Court has extended its injunction and granted permission to hear four petitions from wine shop owners contesting the issuance of licenses that allegedly violate excise regulations.
The trial, which will involve the former Minister of Finance and the Excise Commissioner General as respondents, is slated for February 6, 2025.
The new administration, led by President Anura Kumara Dissanayake, has committed to investigating these allegations, including the counterfeit security sticker scandal.
Wasantha Samarasinghe, a member of the National People’s Power Executive Committee, claimed that certain Excise officials accepted bribes of up to Rs. 2 million for liquor licenses during the previous government. He further alleged that the Commissioner General issued 500 new licenses, including 70 to businessman Arjun Aloysius, who reportedly paid around Rs. 30 million per license. Some officials involved in these transactions allegedly received rewards in the form of liquor licenses.
In response, Mr. Gunasiri refuted these accusations, stating that only 172 licenses have been issued since May 2023, in accordance with government policy, generating Rs. 2.2 billion in revenue. He also noted that companies involved have agreed to settle their outstanding tax dues for 2023 and 2024 by November 30.
Additionally, it has come to light that some businessmen who paid Rs. 20-30 million for licenses from politicians in the Kandy District were adversely affected when the new government opted to cancel their licenses.
Meanwhile, the Department of Excise is embroiled in a significant fraud case involving counterfeit liquor stickers, which has cost the government billions in tax revenue. Former Justice Minister Wijeyadasa Rajapakshe estimates that the annual loss from this scam is around Rs. 60 billion, with the Mendis Company, owned by Arjun Aloysius, accountable for Rs. 440 million in lost taxes.
