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Pricing formula for cigarettes soon 

11 Oct 2021

  • Cabinet paper by Keheliya in the pipeline 
BY Dinitha Rathnayake A Cabinet paper is to be presented by the Health Minister Keheliya Rambukwella related to formulating a pricing formula for cigarettes soon, which would increase the price of cigarettes annually by 6%. The National Authority on Tobacco and Alcohol (NATA) Chairman Dr. Samadhi Rajapaksa said that a price formula has been prepared for cigarettes. Rajapaksa noted that the said price formula has been handed over to Rambukwella and that it has been discussed, and that therefore, it is hoped that it would be included in the next budget in order to increase taxes on cigarettes. In the past, even though cigarette prices have been increased, the Government was unable to earn revenue, he claimed. Rajapaksa also said that the intention of introducing such a price formula is to increase the expected income despite the increase in the price of cigarettes in the recent past. “According to the price formula, if the price of a cigarette can be increased in 2022, then from 2022 to 2026, the Government would receive about Rs. 125 billion in direct revenue. According to the price formula, the price of a cigarette increases by 6% every year. Also, the sales volume in Sri Lanka is decreasing. From a health point of view, it is a very valuable thing. Smoking kills 60 people a day. It costs three to four times the tax revenues to treat tobacco-related illnesses,” further claimed Dr. Rajapaksa. Previously, the cigarette prices were not decided under a price formula. According to Dr. Rajapaksa, reducing the buying capacity of cigarettes would protect the health of the public and help save their personal finances. According to the price formula, the prices of cigarettes would be increased every year and would help to reduce the consumption of five categories of cigarettes which are used in Sri Lanka.


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