Press briefing of Cabinet Decision taken on 2016-09-27

Revision of taxes imposed on Cigarettes and Tobacco Products

- It has been revealed through surveys that 15% of persons between the ages of 18 to 69 in Sri Lanka are smokers and it is estimated that the annual deaths which occur due to tobacco related diseases amount to approximately 30,000. It has been calculated that the Government has to spend annually, a sum of about Rs.72 billion to treat the ailments caused through the use of tobacco. 'Imposing of taxes' has been identified as a successful methodology in controlling the use of tobacco and the consumption of cigarettes, by the World Health Organization (WHO). Accordingly, as per the recommendation made by the Ministerial Committee appointed to consider the joint proposal made by H.E. the President Maithripala Sirisena and Hon. (Dr.) Rajitha Senaratne, the Minister of Health, Nutrition and Indigenous Medicine, to revise the tax imposed on cigarettes and tobacco products, the Cabinet decided to re-impose the 15% Value Added Tax (VAT) on cigarettes; to increase the production tax on a cigarette of any size by Rs.5/-; to increase the cess tax on import of beedi leaves from Rs.2,000/- to Rs.3,000/- per kilogram; and in addition, to take action to reduce the use of tobacco in the country, through the adoption of other measures as well.