Row over beer tax

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By 2017-11-19

By Sanuj Hathurusinghe

Finance Minister Mangala Samaraweera's maiden budget saw the reduction of excise taxes on beer by 33 per cent and an increase of excise taxes on hard liquor by 2 per cent, which took effect immediately.

In addition to that a newly introduced two per cent nation building tax on all alcohol beverage sales will take effect from April 2018.

'Dry Day'

The new lenient tax policy on alcoholic beverages is a bold decision considering the country being a pre-dominant Buddhist nation.

In June Samaraweera proposed that the laws pertaining to obtaining beer and wine licences should be more lenient. The Minister went on to state that some of the out-dated regulations such as making Christmas Day a 'dry day' should be rethought as such laws are discouraging tourism in Sri Lanka.

Foreigners

The new tax policy is appreciated by the hotel industry. Speaking to Ceylon Today the Assistant Resort Manager of 98 Acres and Spa, Kingsley Santiago said that the reduced tax on beer is good for the industry. "Most of the foreigners don't ask for hard liquor. They request beer or wine. With the new reduced prices, foreigners can buy a can of beer for a dollar or so, which is great for them. In our hotel we have special meal plans that include liquor, such as a glass of wine. Now it is much easier to promote more and more such offers," he said.

Justifying his decision on reducing taxes on beer, Minister Samaraweera went on to state in Parliament that beer is healthier than sweetened soft drinks. Both beverages have their fair share of pros and cons but a proper comparison of the two is yet to be done in Sri Lanka but not so in other countries.

Milk

According to the United States Department of Agriculture (USDA) national nutrient database, both beer and wine contain less calories and Sodium compared to milk. The database goes on to show that while milk contains some fat and cholesterol, it is not the case with wine and beer.

People for the Ethical Treatment of Animals (PETA) ran a campaign to encourage people to switch from milk to beer. In 2016, the organization ran an advertising campaign near the University of Wisconsin-Madison saying beer is officially better than milk.

The campaign was short-lived as promoting beer right outside a university is a problem enough, especially while the particular university has been ranked as the country's top partying school.

Kasippu

It is questionable whether such numbers apply to beer in Sri Lanka. Following Minister Samaraweera's beer argument, Health Minister Rajitha Senaratne was quick to say that the facts brought to justify the decision were wrong. He also stated that drinking beer in Western countries is part of their meal and culture while here in Asia it is not.

Minister Samaraweera did however produce some research findings in his budget speech which stated that 49 per cent of alcohol users in Sri Lanka consume the illicit brew known as Kasippu. He was quoting a research conducted by the University of Colombo but the Alcohol and Drug Information Centre (ADIC) challenged the Minister on the credibility of this so-called research.

Releasing a statement ADIC stated that the University of Colombo has declared that they have not conducted or published such a research. The Centre also states that the author of the referred article, a lecturer in the Department of Economics at the university, Priyanga Dunusinghe has admitted the research was done in a personal capacity and not by the University.

Hard Liquor

The Finance Minister also stated that the majority of Sri Lankan alcohol consumers take hard liquor, unlike in most of the other countries where the trend is the opposite. This however, is true. According to the World Health Organization (WHO) global status report on alcohol and health 2014, 85.2 per cent of the alcohol consumers in Sri Lanka take spirits/hard liquor while only a 13.1 per cent consume beer or wine.

Consuming less hard liquor seems to be the way of many countries but is it the healthier option? Is reducing taxes on beer a good thing? Will the new taxes be useful in reversing the hard and soft liquor consumption ratio in Sri Lanka?

Deepthika and Nisansala, two youths with the Faculty of Arts at the University of Colombo, think beer is the better option.

"Drinking in moderation is the way to go. Otherwise, it will lead to a number of social troubles. If one has to consume alcohol, we think beer is better than arrack. We don't know whether it is healthy or not, but a tax reduction on beer and a raise on hard liquor is a good thing," they declared.

Priyankara Bandara thinks that it is good to reduce taxes on beer with the hope of reversing alcohol consumption patterns but there are some other pressing matters we really should address. "We only care about prices of goods being reduced while there are more important things that need to be considered such as our energy crisis for example. We need long-term plans to address those issues. Beer prices are not the most important thing in the country at present," he said.

Mindset

Nirmal Rajapaksha, the youngest film director in the country told Ceylon Today if the government seeks to reduce hard liquor consumption by placing regulations it may not be the best course of action. "People's mindset has to be created. Placing pictorial warnings on cigarette packs was something admirable as these are ways of making people to re-think. This is what is needed instead of forcing people with taxes," said Rajapaksha.

(Pix by Sarath Kumara )

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