Sri Lanka cuts beer tax, ups tax on sweet drinks

ECONOMYNEXT – Sri Lanka, a country where kids still suffer from malnutrition, has slapped sugar tax on kids drinks, copying an interventionist levy practised in European rich countries where people are obese, while cutting taxes on beer.

Sri Lanka has in the past adopted interventionist fads from European nations including interventions in language.

In Sri Lanka fizzy drinks are among the few foods enjoyed by poorer kids.

Unlike their rich urban counterparts, poorer kids walk longer distances, sometimes without shoes, which are taxed heavily in Sri Lanka.

A tax on 50 cents will be imposed on a gram of sugar in drinks.

Hard alcohol will be charged 3,300 rupees per litre of tax, beer and wine 2,400 rupees. The state policy of taxing beer heavily over decades has tended to promote hard liqour use, some have argued. Until 2015 however ‘strong beer’ was taxed at a lower rate, helping a drive up demand.

Sri Lanka also cut a tax on beer cans, which was alleged to have been imposed in a bid to promote quarter bottle arrack sales.

Other interventionist taxes include a carbon tax which goes up to 1.50 per cubic centimetre for vehicles over 10 years old. (Colombo/Nov09/2017)