Diminishing returns in Sri Lanka

| December 6, 2016

The Sri Lankan Finance Ministry has revised down its 2016 cigarette tax revenue estimate by almost 12 percent, from Rs99.6 billion (US$ 656.6 million) to Rs88.0 billion (US$ 580.1 million), according to a story in the Sunday Times relayed by the TMA.

The revision was made after data showed that the October revenue contribution of the country’s sole cigarette company, Ceylon Tobacco Company (CTC), was well down on that for the average month during the first nine months of the year.

CTC paid Rs75 billion (US$ 494.4 million) in taxes to the government during January-September this year, or an average of Rs8.3 billion (US$ 54.7 million) per month.

But its contribution during October was Rs4.2 billion (US$ 7.7 million).

The company had reported a significant decline in cigarette sales due to two consecutive price hikes following tax increases.

Category: Breaking News

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