Committee on Public Finance (COPF) Chairman Harsha de Silva says there is a large-scale scam behind the production of liquor bottle security stickers, warning that the losses dwarf the annual cost of the Suwaseriya ambulance service.
According to de Silva, officials responsible for producing the authentication stickers had assured the committee that everything was under control. However, a recent raid that uncovered illegal liquor indicated that a racket producing false stickers is operating, allowing untaxed liquor to reach the market.
Citing an example, he said the state loses about Rs. 3,600 on every bottle of illicit “old arrack.” Legitimate taxes on such a bottle should total roughly Rs. 1,600, but producers of counterfeit arrack pay nothing because their income goes unaccounted for.
The security stickers are meant to authenticate legally produced and taxed liquor, making counterfeiting a direct hit to excise revenue. De Silva said the scale of the fraud demands urgent scrutiny of how the sticker system is administered and policed.
The remarks add to mounting concern within the COPF over leakage in excise and tax collection, an area the government has pledged to tighten as it works to shore up state revenue.
