Sri Lanka adds more taxes for smokers

Sep 30, 2016 (LBO) – Sri Lanka’s Cabinet has approved a 15 percent Value Added Tax (VAT) and 5.00 rupees production tax on cigarettes as well as an increase of cess on the import of “beedi” leaves, a statement said.

“Cabinet has decided to impose 15 percent VAT on cigarettes again, increase the current production tax to Rs. 5/- for any size cigarette, and to increase the cess on import of beedi leaves from 2,000 rupees to 3,000 rupees and to take other actions to minimise the tobacco use in the country,” the Cabinet announcement said.

“15 percent of Sri Lanka’s population between the ages of 18-69 smoke and the State spends 72 billion rupees each year to treat tobacco related illnesses.”

Currently taxation on cigarettes in Sri Lanka is the third highest in Asia. In the first half of 2016 the Government earned 46 billion rupees, up 12 percent from the previous year.