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Govt. revenue from fags halves after price hike


Comments / 1166 Views / Wednesday, 23 November 2016 01:08


Ceylon Tobacco Company has contributed Rs. 75 b in Government revenue during the first nine months of 2016 at an average of Rs. 8.3 b per month but prospects for State coffers look bleak going forward according to industry analysts.

Consequent to the excise hike on 4 October 2016, the price of the most popular brand of cigarettes sharply increased to Rs. 42, a 20% increase. 

Cigarette prices once again increased on 1 November with the imposition of 15% VAT taking the price of a stick of cigarette further up to Rs. 50, a 43% increase over a course of one month. 

Consequent to this CTC’s contribution to the exchequer has dipped significantly and is reported to be only Rs. 4.2 b, a 51% drop from the first nine months average.

Health activists are alarmed that while cigarette prices have drastically increased, other tobacco products such as beedi have been exempted from tax increases, offering smokers who are already price conscious a cheaper alternative. As prices stand currently, smokers can purchase around 10 beedi’s for the price of one cigarette.


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