Government tax earnings from cigarette sales are likely to see a reduction in 2017 for the first time in five years. According to provisional data, the government earned LKR 86 billion from tobacco excise in 2017 compared to LKR 88.7 Billion in 2016, a drop of Rs. 2.7 billion, a Ceylon Tobacco Company press release said.
It adds – ‘In 2016, the tax revenue from tobacco grew 12.46 percent year-on-year and government excise earnings from tobacco alone was LKR 88.7 billion, a drastic increase from LKR 57 billion in 2014.
‘CTC attributes 2017’s 3.10 percent reduction in government tax revenue to the
significant increase in the price of sticks in Q4 2016. The unprecedented 40 percent price increase resulted in a huge drop in sales volumes. Unfortunately, most of this volume drop was filled by smuggled cigarettes which are estimated at 500 million sticks in 2017.’