Govt. raises excise duties on fags to maintain overall taxes

The government has increased excise taxes to maintain the overall taxes on cigarettes, effective from December 1, following the reduction in the Value-Added Tax (VAT) and abolishing of the Nation Building Tax (NBT). 

The Finance Ministry, through an extraordinary gazette, ordered to increase excise taxes in the range of Rs.1.68 to Rs.6.15 per cigarette, based on length.

The excise tax on cigarettes between 67-72 millimetres was raised to Rs.37,650, from Rs.33,000 per 1,000 sticks, while the tax for cigarettes between 60-67 millimetres was increased to Rs.22,300, from Rs.19,500.

The cigarettes ranging 72-84 millimetres are now taxed at Rs.43,100, up from Rs.37,600 per 1000 sticks. 

The excise tax on cigarettes over 84 millimetres was increased to Rs.48,350 per 1,000 sticks and the new excise tax for cigarettes below 60 millimetres is Rs.13,360.

According to the sources of Ceylon Tobacco Company PLC, the monopoly of cigarette manufacturing and sales in Sri Lanka, the firm is unlikely to make any price revisions to the current cigarette price structure. 

The government recently cut the VAT from 15 to 8 percent while abolishing 2 percent NBT on domestic goods.