Sri Lanka loses over Rs. 25 bn in cigarette tax revenue since 2025: Verité Research

Colombo, July 14 (Daily Mirror) - Sri Lanka has lost more than Rs. 25 billion in potential tax revenue since 2025 due to cigarette taxes remaining below the benchmark recommended by the World Health Organization (WHO), according to Verité Research.

The policy think tank revealed that the Government lost over Rs. 8 billion in potential revenue during the first six months of 2026 alone.

The findings were released alongside the launch of the Cigarette Tax Leakage Tracker, a real-time online dashboard developed by Verité Research to monitor fiscal losses resulting from cigarette taxation. The tracker provides minute-by-minute estimates of the revenue forgone and is available on PublicFinance.LK, the organisation's public finance analysis platform.

According to Verité Research, the WHO recommends that taxes account for at least 75% of the retail price of cigarettes to effectively reduce tobacco consumption while maximising government revenue.

Sri Lanka last came close to meeting this benchmark in 2018, when taxes accounted for 74% of the retail price of cigarettes. However, the tax share has declined in recent years and has remained at 67% since 2025, resulting in significant revenue losses, the organisation said.

Verité Research said the tracker is intended to provide policymakers and the public with a transparent tool to monitor the fiscal impact of cigarette tax policies in real time.

The dashboard can be seen on PublicFinance.LK, Sri Lanka’s premier platform for public finance insights and analysis. https://dashboards.publicfinance.lk/cigarette-tax-leakage/