LNP – Sri Lankans spend Rs.520 million per day on cigarettes

In lieu of the upcoming World No Tobacco day, a study revealed that Sri Lankans spend Rs. 520 million per day on cigarettes and the health and economic costs of smoking were Rs.214 billion in 2019, the Alcohol and drug information Centre (ADIC) in a media briefing about tobacco habits said.

According to the 2020 Global Adult Tobacco Survey a total of 3.2 million Sri Lankans consume tobacco daily, and 20,000 premature deaths every year in Sri Lanka are caused by tobacco. Around 1.8 billion plastic cigarettes per year are not discarded properly in Sri Lanka which causes 7000 toxic chemicals into the ecosystem and harms the environment.

The media briefing by ADIC also said that “due to a lack of proper tax collecting mechanisms, the government’s tax revenue from cigarettes decreased by Rs. 9.4 billion in 2024, instead it was transferred as profit to the producer.”

Dr Ananda Rathnayake, chairperson of National Authority on Tobacco and Alcohol (NATA) said “people think that reducing the tax on cigarettes may lead to more smuggling of cigarettes which is absolutely not true.”

Another major issue mentioned by ADIC is that tax-in-price on cigarettes is at 67 to 69 percent which is below the World Health Organization’s recommended rate of 75 percent. ADIC also said that even though cigarette sales have decreased by 54 percent in the past decade, Ceylon Tobacco Company’s profit after tax has increased by 179 percent.

A research done by Verite Research reveals that “the tax for most products subject to VAT has more than doubled since the economic crisis but for cigarettes it has actually decreased.” The research also mentioned that cigarettes may be the only product in the market where tax revenue has declined in 2024, while suppliers’ revenue has increased.

ADIC said that measures to address these challenges are being taken. A framework on banning the sale of cigarettes one by one is being proposed, while also prohibiting the sale of tobacco to people born after 2010.