• The UNDP and WHO estimated that tobacco caused an economic loss of Rs. 214 billion in 2016

The Sri Lanka Medical Association (SLMA), the oldest national professional organisation of medical professionals in Australasia, has written to Prime Minister Ranil Wickremesinghe urging him to go by the guidelines of World Bank (WB) and World Health Organization (WHO) when determining taxation for tobacco and alcohol.  

While commending the efforts made by the prime minister to mitigate the damage done by the ongoing economic crisis,the SLMA has requested him to increase taxation of tobacco products using a technically sound formula that will align the taxation to inflation and review the current alcohol taxation policy and take immediate steps to increase taxation.  

The letter signed by SLMA President Professor Samath D. Dharmaratne and Chairperson of its Expert Committee on Tobacco, Alcohol and Illicit Drugs, Professor Narada Warnasuriya, reminds the prime minister of the WHO and UNDP and WHO calculations in 2016 which found that Sri Lanka incurred an economic loss of Rs. 214 billion even in 2016 while the studies by National Authority on Tobacco and Alcohol, WHO and the SLMA revealed the estimated economic losses of alcohol to be Rs. 120 billion in 2015.  

According to the SLMA, the UNDP and WHO estimated that tobacco caused an economic loss of Rs. 214 billion in 2016, while the National Authority on Tobacco and Alcohol, WHO and the SLMA conducted a study using a very conservative methodology that estimated economic losses of alcohol to be Rs. 120 billion in 2015.   There is an urgent requirement to increase taxes and an opportunity to increase government revenue,” it wrote.  
The SLMA proposes;   

1. Increase taxation of tobacco products using a technically sound formula that will align the taxation to inflation and minimize their affordability.  Technical recommendations in this regard have been made by the National Authority on Tobacco and Alcohol, Institute of Policy Studies and Verite Research.  

2. Carry out an urgent review of current alcohol taxation policy and take steps to increase taxation in order to reduce its affordability .

3. Consider both tobacco and alcohol products as the non-essential products, which they are. Therefore, steps need to be taken to:  
a. Discontinue all the duty-free concessions provided for sale of these products.  
b. Disallow imports of alcohol and tobacco products and products related to manufacture of such products. 

4. Remove tobacco and alcohol products that are in the basket of products that are used to track consumer price inflation to remove the effect of tax increases of these products on the inflation calculations,” it wrote.