Digital security sticker system ups Excise Department revenue by 32.2%

The Sri Lanka Excise Department has recorded a significant 32.2% increase in revenue within just nine months following the implementation of a new digital security sticker system for locally manufactured liquor. Total revenue during this period reached Rs. 124.6 billion, a surge attributed to the digital system’s ability to recover taxes that previously went unpaid.

The project, managed by Madras Security Company (MSC), was introduced to curb tax evasion, stop the production of counterfeit liquor, and safeguard government revenue. The partnership, which began following a transparent government procurement process in 2018, saw the full rollout of the security system for all local liquor bottles on January 3, 2022.

Unlike traditional supply contracts, MSC is responsible for the entire operation and maintenance of the system. This includes providing specialized direct marking equipment, spare parts, and consumables under a Service Level Agreement (SLA).

A unique aspect of this digital transformation is its funding model.

Digital security sticker The company confirmed that the government does not spend any money from the national budget to maintain the digital infrastructure. Instead, the costs are covered by a Rs. 2 fee charged to manufacturers for each sticker. According to the company, this fee not only covers production but also generates additional income for the government. Furthermore, Madras Security Company covers the costs of essential digital infrastructure, including servers, cloud services, and internet connections, saving the state from massive capital expenditures.

The stickers and digital codes employed are far more advanced than standard barcodes. They feature: Visible, hidden, and forensic protection Special DNA-marked ink and food-grade traceable ink. High reliability through dedicated backup systems and cloud infrastructure.

The company highlighted its commitment to fair pricing, offering 1,000 security stickers for a basic price of US $5.99. Even more advanced digital codes are supplied at the same rate, as they are exempt from import taxes. MSC noted that its pricing remains lower than many other international suppliers, resulting in significant savings for the Sri Lankan government. With the system now fully operational, the focus remains on enhancing product traceability and further reducing the footprint of illegal trade in the liquor market.

Source: Daily News