Beer tax: Rajitha to demand revisit

Health and Indigenous Medicine Minister Dr. Rajitha Senaratne said he would submit a report to the Cabinet tomorrow (28) demanding a revisit to the tax reduction on beer by the budget 2018 as the facts and figures quoted in the budget proposals justifying the tax reduction on beer were factually incorrect.

Minister Senaratne, who is also a Co-Cabinet Spokesman stressed that there was no evidence to prove that beer consumption would reduce the consumption of hard liquor and sale of illicit liquor like kasippu.

He also said that the Colombo University had not done a study on the issue as quoted in the budget speech.

Minister Senaratne said the kasippu consumption according to available statistics was less than 6% among alcohol users in Sri Lanka and not 49% as quoted from the Dunusinghe’s study.

He also added he would demand a withdrawal of the tax reduction on beer from the budget proposals.

In the budget speech, it was stated that 49% of alcohol users in Sri Lanka consume illicit alcohol quoting a research (sic) reportedly carried out by the Colombo University.

But the University says it has not published any report to that effect, as mentioned by the Minister of Finance.

“After the Alcohol and Drug Information Center (ADIC) contacted the author of the referred article Mr. Priyanga Dunusinghe, a lecturer at the Department of Economics, he had admitted that it was his personal research and not a research conducted by the University,” Minister Senaratne added.

“I will try to convince my Cabinet colleagues that it is unwise and illogical to make tax proposals based on incorrect statistics and private studies.

“Besides, the Yahapalana Government and President Maithripala Sirisena are committed to putting an end to the use of tobacco and alcohol in Sri Lanka. That is why this Government, the Health Ministry and President Sirisena get accolades and honours from all over the world for our efforts to control the use of tobacco and alcohol.

“The sharp reduction of tax on beer does not help our objective. I urge the Government, therefore, to withdraw the tax reduction on beer,” he added.

Meanwhile, the ADIC in a statement said that it was pathetic that Finance Minister Mangala Samaraweera, a senior Cabinet Member quoting a personal research as a research of the University of Colombo and other Senior Cabinet Ministers repeating the same facts clueless.

“The aforesaid research has not yet been published in any scientific journal, report or presented in any accepted conference. The Finance Minister has justified his arguments on reducing beer prices based on the publication of this study paper in a two Sinhala and English newspapers just before the budget speech on November 9 in Parliament,” the ADIC said.

“The next most important fact is that the research is not conducted using primary data, which is the most suitable approach to finding the prevalence and trends in alcohol use in a country. But this study was done analysing secondary data from Household Income and Expenditure Survey (HIES), where he has made an assumption of poor, manual labourers and farmers, who use alcohol, drink only kasippu.

“According to the published facts, all low-income households, farmers and labourers in the country use alcohol, assumed to use kasippu, generalising 49% of the population who use alcohol in the country are kasippu users.

“If this is true, 195,965,246 litres (195 mn) of kasippu should be locally produced. (In 2015, annual total production quantities of alcohol companies include- 112, 092, 935 litres of beer, 63,072,311 litres of arrack. This is not practical at all,” it said.

“The most amusing fact is the using the of this particular research in policy reforms, when there are numerous scientifically proved research findings, revealing facts contradicting the facts of this article,” the ADIC said in its statement.