Illicit fags incur annual loss of Rs.18Bn as revenue to govt. – Study

7 January 2019 06:37 pm - 4     - {{hitsCtrl.values.hits}}


The illicit cigarette trade in Sri Lanka has incurred a staggering loss of Rs.18 billion to the government as tax revenue every year, the latest results of an academic research was revealed today.

A baseline study on the illicit cigarette market in Sri Lanka, a comprehensive research and the first of its kind in the country carried out by three senior academics of the Open University of Sri Lanka (OUSL) and the University of Kelaniya was unveiled by the experts at OUSL Senate Room today.

The study basically discusses how illicit cigarettes enter the local market, such as through container loads of numerous import goods that arrive in great numbers in the port and individually being smuggled in by foreign expatriate workers and carriers concealed in their baggages.

Dr. S. N. Morais of Department of Social Studies of the OUSL, Prof. S. S. Colombage (Emeritus) of the Department of Social Studies of OUSL and Dr. C. N. Wickramasinghe of Department of Commerce and Financial Management of University of Kelaniya who undertook the study formally handed over the report to Vice Chancellor OUSL Prof. S. A. Ariadurai.

Explaining the objectives of the research Dr. Morais said the research report is intended to provide independent observations on the prevalence and consequences of the illicit cigarette trade in the country.

“The scope of the study is confined to assessing the extent of the market share of illicit cigarettes in Sri Lanka and to estimate the tax revenue loss to the government on account of such trade,” he said.

The study has been mainly based on observational methodology which relied on material evidence collected from statistically-unbiased field surveys.

Observations had been made in several selected districts including Colombo, Gampaha, Kalutara, Galle, Matara and Ampara where statistical data were gathered based on the surveys of cigarette butt collection, empty packs, test purchase and smoker surveys.

As per these data, the academics predict a loss of Rs.17.93 billion as tax revenue to the government is incurred annually, in consideration of tax generated from the legitimate cigarettes manufacturing industry in the country.

The event was attended by senior law enforcement agency officials including Police Special Task Force, Excise Department, Sri Lanka Customs, SL Army and also representatives of Ceylon Tobacco Company. (Kurulu Koojana Kariyakarawana)

Pix by Nimalsiri Edirisinghe

  Comments - 4

  • S. S. Dissanayake Monday, 07 January 2019 07:06 PM

    Nobody should be surprised at this. If there is a demand, it will be satisfied by fair means or foul. Increasing prices of alcohol and tobacco products will only result in kasippu mudalalis and smugglers doing more of their work. People will continue to smoke and drink while the government coffers do not benefit in the way it used to. Stupid politicians with one foot in the grave trying shortcuts to nirvana!

    ihatepoliticians Monday, 07 January 2019 08:52 PM

    Why the sale of cigarettes (a proven killer) is not outlawed?. I suspect it is something to do with money! as always.

    Smith Tuesday, 08 January 2019 08:39 PM

    If taxes were not so high there would be no smuggling.

    nsathees Wednesday, 09 January 2019 08:47 AM

    One Goldleaf cost Rs 10.80 to manufacture and distribute. Rs 44.20 tax, that's what making it a profitable business to smuggle with low punishment.

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