The Colombo-based policy think tank, Institute of Policy Studies (IPS) in a recent communique highlighted that there is evidence to support that the economic burden imposed by non-communicable diseases (NCDs), was such that some households in Sri Lanka spend 10% of their monthly budget on alcohol. This, while World Bank data suggests that a shocking 83% of deaths in the island can be attributed to a contribution of NCDs. The relation is a stark reminder of how alcohol use and abuse creates challenges in Sri Lanka. 

However, the State often looks at the sale of alcohol as a valuable source of income for the economically challenged island. However, no amount of revenue raising can justify the damage alcohol abuse does to the Sri Lankan community. Despite the significant amount of state revenue alcohol taxation brings, alcohol use is a prominent risk factor for NCDs, aggravating the cost of public and private healthcare and contributing to issues such as road accidents, public disorder, low productivity, and domestic violence. The World Health Organisation (WHO) had estimated that in 2015 alone, the economic cost of alcohol-related conditions amounted to a staggering $ 885.86 million, equivalent to 1.07% of Sri Lanka’s GDP for that year. In a 2023 study, women described how they were affected by someone else's alcohol use, typically a husband’s or father's, and how it sometimes resulted in, domestic violence, prolonged physical, verbal and mental abuse, self-harm or suicide attempts. Alcohol-related violence and arguments over household funds were common.  

Studies have found that Sri Lanka experiences higher levels of secondhand harm from alcohol than many other countries do. One such study conducted in 2018, indicated that nearly 90 % of survey respondents reported some type of harm from alcohol users in their family or among friends. These ranged from physical harm to emotional hurt or financial harm. In more than 10 % of Sri Lankan households, children are adversely affected by alcohol as of 2018. Further, almost 10 % of the urban population uses alcohol at high-risk levels, contributing to liver disease and other noncommunicable diseases.  Given the economic upheaval which occurred due to the COVID19 pandemic and the economic crisis of 2021-23, the impact of alcohol abuse may be much more today. Reports from law enforcement agencies also point to an increase in the use of illicit liquor in the island.

IPS researchers noted that alcohol-related taxation is a cost effective measure to reduce NCD related risk factors, particularly among low-income groups, where the progressive nature of alcohol taxation, concerning which higher-income groups bear more of the tax burden, was underscored. IPS Researchers also highlighted the potential of increased excise duty rates to reduce alcohol consumption while generating government revenue, contributing to economic recovery. Challenges related to data availability for accurate modelling were acknowledged, emphasising the need for quality disaggregated data for informed policy decisions. From the expert panel IPS had convened, recommendations highlighted the importance of designing a medium-term alcohol tax policy that considers both revenue generation and health impacts, ensuring a balanced approach to alcohol control. The experts also  discussed the intricate dynamics of industry interference in alcohol policy and proposed strategies to mitigate its adverse effects on public health.

Experts point to a need for awareness building regarding the common perceptions of alcohol use, and the real impact of alcohol consumption has on communities. Addressing a policy forum of the issue organised by the IPS, National Alcohol and Tobacco Authority Chairperson highlighted the health costs of alcohol consumption and the disproportionate burden of alcohol-related violence and health issues on vulnerable communities. He stressed the imperative for collaborative efforts among the Government, think tanks, media, and civil society to address these challenges. This need for a broader engagement and consensus on the impact of alcohol use has been made many times in the past, but has not seen significant traction from many governments. This could be due to consecutive governments viewing the alcohol taxation as a revenue source, while conveniently neglecting the broader social and health cost, which exacerbates state expenditure. Such approaches to governance, is primarily due to lack of evidence based policy making, a long entrenched culture of disregarding subject matter expert opinions, and the law makers and public officials’ sheer disregard for public and community well-being. However, such a culture of governance is not sustainable. As Sri Lanka attempts to push a reforms agenda to make the island nation more economically stronger, resilient and diverse, governance practices regarding policymaking need to evolve as well. As such, the state, the current government and a future one, (post elections) would be wise to follow the pointers given by think tanks such as IPS, and develop evidence based policies on issues which both affect revenue and the socio-economic fabric of Sri Lanka.