Friday, 20 November 2020 17:50

Revenue from Excise duty records ups and downs during Covid-19

Revenue from Excise duty increased significantly by 11.6% to Rs. 105.6 billion in the first three months of 2020, compared to Rs. 94.6 billion recorded in the same period of 2019 with the increased revenue from all categories applicable to excise duty other than motor vehicles, finance ministry outlined.

However, reflecting the impacts of the COVID-19 pandemic, the revenue declined significantly by 44.9% to Rs.54.5 billion in the second quarter of 2020 and recovered in the months of August with the new normal situation in the country.

Revenue from Excise duties continued to be the leading contributor for the government tax revenue, accounting for 26.8% of the total tax revenue from January to August with a 60.5% achievement against the annual estimate of 2020.

Revenue from excise duty on cigarettes increased slightly by 1.1% to Rs.58.9 billion during the first eight months of 2020, compared to Rs.58.3 billion in the same period of 2019 despite the drop in cigarette sales during the period of 2020. However, an upward revision of Excise duty on cigarettes has a positive impact on this revenue performance partially outweighing the effect of sales drop.

Revenue generation from Excise duty on the importation of motor vehicles declined notably by 47.1% to Rs.43.1 billion in the first eight months of 2020, compared to Rs.81.5 billion recorded in the same period of 2019.

This subdued performance was mainly due to the sharp decline in motor vehicle imports in the first eight months of 2020 due to the restriction imposed on the importation of motor vehicles effective from March 2020.

In addition, an upward revision of Excise duty on motor vehicles in line with the budget 2019 has a negative impact on the importation of motor vehicles.

The decline in revenue from liquor observed in the months of March to May was revered in the months of June to July showing the recovery of its growth momentum.

This recovery has resulted to decline in revenue marginally by 4.1% to Rs.72.5 billion during the first eight months of 2020 from Rs.75.6 billion in the same period of 2019 mainly due to the decline in liquor production and liquor sales during the COVID-19 pandemic period.

(LIN)

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