Sri Lanka may increase taxes for tobacco and alcoholic products in the next budget


July 8, 2015 (LBO) – Sri Lanka may increase the taxes for tobacco and alcoholic products in the coming budget as the economic loss for the country is threefold than the income from these products to the government, government official said.

“We expects the government will take action with regard to the price of tobacco and alcohol products in the next budget,” P B Abeykoon, Secretary to the President told reporters on Wednesday.

“Even though the income for the government from tobacco is 74 billion rupees and from alcohol is 53 billion rupees, the actual economic loss to the country is three fold when you think about the effect of deaths and accidents causes from these products,”

“The one way you can control the consumption is through increasing prices. But the prices have not increased compared to the spending capacity of the customer,”

“The price of a cigarette should increase to 45 rupees.”

Abeykoon was speaking to media today to announce the drug prevention programme of the government which supposed to begin from 9th Thursday this month.

The output of the tobacco sub sector recorded a decline of 9.3 per cent in 2014 compared to 2013 mainly due to the drop in demand, Central bank data showed.

The government increased excise duty on cigarette and public health concerns relating to tobacco consumption reduced the demand for tobacco products during this period of last year.

Central Bank says the demand is expected to decline further in coming years with the impact of the government regulation on the compulsory display of 80 per cent pictorial warnings on the tobacco packages and consequent improvement in public awareness.