July 20, Colombo (LNW): Chairman of the Committee on Public Finance (COPF), Dr Harsha de Silva, has alleged that a large-scale fraud involving the production and distribution of liquor bottles is depriving the State of billions of rupees in revenue, describing the operation as one of the country’s most significant financial scams.

Speaking to reporters, de Silva claimed that the financial losses linked to the alleged racket are estimated to be eight times greater than the Government’s annual expenditure on the Suwaseriya ambulance service.

Referring to a recent meeting of the Committee on Public Finance, he said officials responsible for the production of excise security stickers had assured the committee that the system was functioning effectively and that no irregularities had been detected.

However, de Silva argued that the recent discovery of a stock of illicit liquor had exposed serious weaknesses in the system. He alleged that counterfeit excise stickers were being used to market illegally produced liquor, allowing those involved to evade taxes while making substantial profits.

Explaining the scale of the alleged revenue loss, the MP said the Government stands to lose around Rs. 3,600 on a single bottle of counterfeit old arrack. Although the applicable excise tax amounts to approximately Rs. 1,600 per bottle, he claimed that operators involved in the illicit trade avoid paying any taxes, while the income generated from these sales remains outside the formal economy.

De Silva urged the relevant authorities to strengthen enforcement measures and tighten oversight of the excise sticker system, warning that unless decisive action is taken, the State will continue to lose significant tax revenue to the illegal liquor trade.