The government will review the new Excise Act which has been drafted by amalgamating the archaic 100 year-old Excise Ordinance and Tobacco Act during the last days of the previous regime.
A single legal framework has been proposed under the new Act to handle the liquor and tobacco industries of Sri Lanka.
The new act was scheduled to be presented in Parliament by the previous regime in December last year.
This move to enact the new Excise Act has been expedited following the ban imposed on ethanol imports to protect the local liquor industry, officials said.
The new Excise Act will include best practices at international level in expanding the excise tax base, simplify tax rates, and introduce new technologies.
The excise revenue management system will be improved with the installing of a digital system for revenue collection similar to the Revenue Administration Management Information System (RAMIS) of the Department of Inland Revenue, they disclosed.
The new Act will be presented in parliament after making necessary amendments in accordance with the new government’s national economic policy frame work.
The Excise Department has been able to achieve the 2019 revenue target of Rs.130 billion, and it has been predicted by considering provisional estimates of receipts this year.
The Department has earned Rs. 113.94 billion in 2018 from the levying of excise duty and tobacco tax compared to the revenue of Rs.113.26 billion in 2017.
The impact of the recent tax relief package will not impact the Excise Department’s profit and loss account.
The financial VAT which constitutes almost 15 per cent of the VAT revenue remains unchanged at 15 per cent.
The potential loss of VAT revenue from cigarettes and liquor which accounts for almost 10 per cent of the VAT revenue has already been eliminated by the upward adjustment of the Excise Duty on cigarettes and liquor, thereby recouping almost 25 per cent of the revenue loss due to the reduction of VAT rate, the Finance Ministry announced.
(LI)