Cigarette prices increased

The prices of cigarettes have been increased by Rs 7 per cigarette with effect from midnight yesterday (3), Finance Minister Ravi Karunanayake said.

Addressing a press conference in Colombo, he also said that the Value Added Tax (amendment) bill will be presented to Parliament today (4).

Last week the Cabinet approved the proposal to impose 15% VAT on cigarettes plus an increase in production tax by Rs. 5 per cigarette.  

Surveys have revealed that 15% of persons between 18-69 years are engaged in smoking and about 30,000 die annually due to tobacco related diseases. 

It has been calculated that the government spends about Rs. 72 billion annually to treat such patients.  

The World Health Organization has identified that taxation is a good measure to control the use of tobacco and cigarettes.  

Recommendations were made by the Cabinet Committee appointed to consider the joint proposal made by the President Maithripala Sirisena and Dr. Rajitha Senarathne, Minister of Health Nutrition and Indigenous Medicine, to revise taxes on tobacco and cigarettes.

accordingly the Cabinet decided to impose 15% VAT on cigarettes again, increase the current production tax from Rs. 5/- for any size cigarette, and to increase the cess on import of beedi leaves from Rs. 2,000/- to Rs. 3,000/- and to take other actions to minimize the tobacco use in the country.