Former President Ranil Wickremesinghe recently issued a comprehensive statement addressing allegations regarding the issuance of liquor licenses during his administration. In his response, he outlined the rationale and legal framework that guided these measures, highlighting the broader economic context and the steps taken to ensure transparency and accountability.
Background and Economic Context
The former President explained that prior to 2022, successive governments had not imposed fees on the issuance of excise licenses. By the time these measures were introduced, Sri Lanka was grappling with a severe economic crisis, with direct tax revenues witnessing a significant decline. The country was on the brink of bankruptcy, necessitating urgent measures to address the fiscal shortfall. Procedural and regulatory committees in Parliament recommended alternative revenue-generation methods. As a result, the government decided to levy fees on excise licenses as a means of bolstering state revenue.
Policy Implementation and Legal Framewor
The 2024 Budget incorporated provisions to enhance excise administration and revise tax policies. Parliament approved these proposals, which introduced structured regulations, new criteria, and limits on the number of licenses issued. The updated fee structure reflected market demand and varied according to the region and scale of operations. For instance, businesses in municipal council areas faced an entry fee of LKR 15 million, an annual license fee of LKR 1 million, and a security deposit of LKR 500,000. Urban council areas were subject to reduced charges of LKR 10 million for entry and an annual fee of LKR 800,000, while non-urban regions were charged LKR 1 million for entry and an annual fee of LKR 600,000. Large-scale establishments exceeding LKR 1 billion in investment faced higher fees of LKR 15 million for entry, an annual license fee of LKR 1.5 million, and a security deposit of LKR 500,000.
These changes were formalized through Gazette No. 03/2024, which came into effect on February 1, 2024. The measures were designed to adhere to constitutional provisions and excise regulations while augmenting state revenue.
Financial Impact
The implementation of the new policy generated over LKR 3.1 billion in revenue between February and October 2024, with projections suggesting this figure could exceed LKR 4 billion by the end of the year. For 2025, the government plans to issue an additional 250 to 300 licenses through competitive bidding, with a minimum bid of LKR 25 million per license. This strategy aims to further increase government revenue while establishing a dedicated fund to support anti-alcohol campaigns.
Transparency and Accountability
In his statement, the former President emphasized that all licenses were issued
in compliance with the established legal framework. Applications underwent
thorough review and recommendation by the Commissioner General of Excise. In
cases where public complaints were raised against license holders, licenses
were suspended, and these decisions were upheld by courts. The Election
Commission also recommended that excise licenses issued during the 2024
presidential election period adhere to established procedures to ensure
impartiality.
Long-term Vision
Wickremesinghe defended the excise license policy as a pragmatic and necessary step to stabilize Sri Lanka’s economy during an unprecedented fiscal crisis. He criticized attempts to politicize the policy and clarified that the issuance of licenses was not a "giveaway" but rather a strategic decision aimed at generating sustainable revenue. The former President urged Parliament to either continue with the current framework or draft a new excise law, emphasizing the importance of prioritizing long-term economic stability over short-term political agendas.
Conclusion
The excise license policy represents a critical component of the government’s
strategy to address fiscal challenges and generate sustainable revenue.
Wickremesinghe’s clarification underscores the importance of transparency,
accountability, and a structured approach to economic recovery. His call for a
long-term perspective highlights the need for policies that ensure stability
and development in the face of significant challenges.
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