The Billion-Rupee Fraud: Why Sri Lanka's Liquor Licence System Needs a Complete Overhaul
The recent arrest of a former minister's brother for allegedly taking bribes in exchange for a liquor licence has ripped the lid off a festering problem in Sri Lanka's governance: the systemic corruption surrounding the issuance of alcohol permits. This incident is not an isolated case. It is a symptom of a much larger, deeply entrenched fraud that has operated under successive governments, costing the national treasury billions and undermining the rule of law. The time has come for a full investigation and a radical restructuring of the entire licensing process.
A Pattern of Abuse, Not an Isolated Incident
The case involving the brother of former Minister S. B. Dissanayake is merely the tip of the iceberg. The arrest by the Criminal Investigation Department (CID) for promising a liquor license in exchange for money has confirmed what many Sri Lankans have long suspected: the valuable and scarce commodity of a liquor licence is being treated as a private asset to be traded for political favours and personal enrichment.
This practice is well-documented. It is "common knowledge that licences for opening liquor shops are issued under political patronage," with politicians from different parties known to own such shops either directly or through proxies . The abuse transcends political divides. Reports have emerged of MPs from both the Samagi Jana Balawegaya (SJB) and the Sri Lanka Podujana Peramuna (SLPP) brokering licences for their cronies in exchange for hefty commissions.
The scale of the problem was further highlighted by revelations that former President Ranil Wickremesinghe approved over 300 bar licenses in his final year in office . While it is argued this was technically within the existing framework, the sheer volume raises serious questions about the criteria and motivations behind such a massive issuance. This interconnected system, where government affiliations often dictate permit applications, has created a structural opportunity for corruption .
The "Leasing" Loophole: A Billion-Rupee Fraud
The most egregious aspect of this fraud, however, is the practice of leasing licences. Under the existing provisions of the liquor licence, a permit is granted to a specific individual for a specific premise. The fraud occurs when licences obtained by politicians or their proxies under previous governments—those of Ranil Wickremesinghe, Mahinda Rajapaksa, and Chandrika Kumaratunga—are subsequently "leased" to third parties for a fee. This is a direct violation of the licence's terms and constitutes a massive, ongoing fraud.
By leasing a licence, the original holder profits from a state-granted privilege without operating the business themselves. The lessee operates under a legal grey area, while the state loses significant tax revenue and regulatory control. This "subletting" of licences is not a minor infraction; it is a fundamental abuse of the system that has allowed a select few to build personal fortunes at the expense of the public and legitimate business owners who are denied permits.
Why a Mass Cancellation is the Only Solution
Given the scale of this systemic fraud and the deep penetration of illicit licences into the system, a piecemeal approach will not work. The current situation demands drastic and decisive action. The entire body of existing liquor licences must be cancelled and a fresh, transparent, and merit-based re-issuance process undertaken.
This is not a radical idea but a necessary measure to cleanse the system of its corrupt elements. For too long, the lack of transparency has created an environment ripe for exploitation. The liquor industry, being a significant revenue generator for the government , must be managed with the highest levels of integrity. The current situation is untenable and risks turning the entire sector into a bastion of corruption.
The Path Forward: Transparency and Technology
Simply cancelling the licences and reissuing them under the same opaque system would be futile. The process must be reformed from the ground up. A critical step is to digitize the entire licensing process through a transparent online system developed in collaboration with the Excise Department . Such a platform would provide universal access, allowing standardized, publicly viewable applications . This would eliminate the "middleman" role played by politicians and their agents, making the system less prone to bribery and fraud.
This approach would not only increase transparency but would also facilitate better tax compliance . As seen with the recent suspension of licenses for companies that failed to settle their tax arrears , a system that is both transparent and accountable is essential for ensuring that all players in the industry contribute their fair share to the national economy.
A Call for Investigation and Reform
The recent arrest has opened a window of opportunity for the new government to confront this long-standing problem head-on. A comprehensive investigation is needed, but it must be followed by concrete action. The "band-aid" solutions of the past will not heal the deep wounds of corruption. A clean slate, achieved through the cancellation and re-issuance of all liquor licences under a new, digitized, and transparent framework, is the only way to restore public trust, ensure fair competition, and guarantee that the state's revenue from this sector is not siphoned off by a corrupt few. The nation is watching, and the time for excuses is over.