Hon. Susantha Kumara Nawarathna

¶ 01 Hon. Deputy Chairperson of Committees, today we are discussing the Rules made under Section 32 of the Excise Ordinance relating to the time for payment of duties on the manufacture of liquor and the levy of surcharge, and the Order under Section 2 of the Special Commodity Levy Act, No. 48 of 2007, relating to the Special Commodity Levy. In particular, taxes on potatoes and onions have been increased continuously in recent times. We are discussing that specifically.

¶ 02 What is the reason to increase the tax on potatoes and onions now? Everyone knows we have hardworking farmers engaged in production. Especially for onion cultivation, in Dambulla, Sigiriya and Anuradhapura areas, farmers historically cultivated large extents. But after 2020 — that is in 2021, 2022 and 2023 — onion cultivation fell dramatically. However, by 2025, with farmers’ own interest and initiative, 2,644 hectares have been cultivated again. As a Government, for those engaged in onion and field crop cultivation, we decided to grant a fertilizer subsidy of Rs. 15,000 per hectare, and we provided it, encouraging the farmers.

¶ 03 On average, the production cost for a kilo of onions for a farmer is between Rs. 90–100. However, at harvest time, the price drops. The reason is that our domestic production does not match national requirements. Annually, the country needs around 300,000 metric tons of onions. Monthly consumption is around 25,000 metric tons. From 2,644 hectares, we expected around 50,000 metric tons — enough for two months’ consumption. Yet farmers could not sell and recover their costs. Therefore, as a Government, we raised the levy from Rs. 10 to Rs. 50. This has benefitted the farmer. We did it to protect our farmers who toil to produce.

¶ 04 Next, we increased the levy on potatoes from Rs. 60 to Rs. 80 per kilo. The production cost of a kilo of potatoes is around Rs. 210. The Leader of the Opposition stated earlier that the cost to produce a kilo of big onions is Rs. 250. We ask him, according to what chart, with what inputs and fertilizers? Farmers do not bear that much. The real cost is about Rs. 90–100. That is the true calculation.

¶ 05 Hon. Deputy Chairperson of Committees, with these levies, we aim both to protect consumers and protect farmers. Therefore, the Ministry of Agriculture must continue to facilitate and support farmers to increase these crops. Prices have now risen to levels allowing the sale of big onions and potatoes with some profit. As a Government, we take necessary decisions at the right moment to protect farmers.

¶ 06 Farmers expected at least Rs. 140–145 per kilo for big onions. Now prices have risen to Rs. 150–160. Accordingly, a good situation is being reported. We discussed these issues recently and took decisions. The Order before us is very appropriate.

¶ 07 Also before us today are the Rules under Section 32 of the Excise Ordinance on time to pay duty on liquor manufacture and surcharges. Why is this presented? Why change the regulations? Many have evaded payment exploiting loopholes in Excise Notification No. 962. I have before me a return up to 2025.09.30 of excise revenue due. It shows 14 leading companies with around Rs. 10 billion in arrears. In 2025 alone, about Rs. 1 billion has been in arrears since January. But it has not been collected.

¶ 08 How do they evade? Although duty is payable within 15 days after production, they keep dragging it. What do we do now? We require that duty due on production must be paid within a maximum of one month; if not, after one month production will be suspended. If it continues unpaid, after three months the licence can be fully suspended. We will collect from many who avoided payment. We levy taxes for the people’s welfare. The taxes we have imposed recently are for the country’s development. I say this regarding excise.

¶ 09 Next, ethanol is related. Arrears for ethanol production amount to around Rs. 193 million; for toddy around Rs. 7 million. Duties due on all these productions have not been paid. Therefore, we are changing the regulatory framework to facilitate collection, and the collected revenue will be used for the development and upliftment of the people. We will ensure revenues are properly used for development and public needs. By approving these Rules on excise, we convey that we support Government action to move forward.

¶ 10 Thank you.