45 pc decline in cigarette sales!

 Dec 15, 2016

The Ceylon Tobacco Company says the sale of cigarettes has declined by 45 per cent following the increase in taxes and prices. The main objectives of these increases were to minimize smoking, a reduction in the number smoking-related deaths, expenses on the treatment of smoking-related illnesses as well as to increase tax revenue.

With the addition of the VAT on the price, the sale of cigarettes is on the decline, with nearly 150 million cigarettes sold in the past month, says the CTC. Also, there has been a parallel reduction in the monthly tax paid to the state, from nearly Rs. eight billion to Rs. 4.2 billion, it says.

For the first nine months of the year, the monthly sale of cigarettes was 330 million on average, and tax revenue earned by the state was Rs. 75 billion. But, in October, when the price went up by Rs. 7.00 per cigarette, sales dropped to 150 million, and taxes paid decreased to Rs. 4.2 billion. Last year, the CTC paid Rs. 92 billion in taxes, and there will be a Rs. nine billion reduction in the projected total tax payments this year, it adds. With the new taxes, Sri Lanka has the second highest cigarette price in Asia, after Singapore.

According to the statistics, smoking has come down considerably in the past two months, and tax revenue to the state too, dropped. The government has noted that despite this decline in revenue, it will have to bear a massive cost to provide hospital facilities and medicines for people who suffer from smoking-related illnesses.