Sri Lanka hikes tobacco taxes

Oct 06, 2012 (LBO) – Sri Lanka has raised tobacco taxes from October 06, a notice posted on the island’s customs office showed, to raise extract more money from citizens and cut a budget deficit stemming from unchecked state spending. The tax hike came ahead of a budget for 2013 to be presented in parliament on November 08.

In Sri Lanka taxes on citizens can be raised without consultation outside the annual budget through a so-called midnight gazette literally while citizens are sleeping, in a fundamental violation of the principle of ‘taxation by consent’ practiced by free countries.

In March 2012, Sri Lanka raised taxes and alcohol as the state enterprises ran losses manipulating energy prices with credit, triggering tax losses, monetary printing and a balance of payments crisis.

A notice on Sri Lanka’s customs office said excise duty on tobacco on cigars had been raised to 7,000 rupees a kilogram (5,500 rupees in March), and cigarettes below 60 millimetres to 4,612 rupees per 1,000 units from 4,037 or 57.5 cents a ciggarrette.

For cigarettes between 60 and 67 millimetres taxes were raised from 9,258 a kilogram from 8,112 in March for 1,000 units and for cigarettes between 67 and 72 millimetres taxes were raised