JO proposes Rs.20 special levy on cigarettes

By Chamodi Gunawardana

The Joint Opposition Economic Research Unit yesterday called on the Government to introduce a Rs. 20 Special Commodity Levy on cigarettes, which in their view could earn an additional Rs. 82 billion annually. 

MP Bandula Gunawardena said the increment could be done via a special gazette notification issued under the Special Commodity Levy Act. Currently cigarette taxes in Sri Lanka earn the Government Rs.80.4 billion per year. 

 “Each day on average 11.2 million cigarettes are being made and the annual production is 4100 million. If the Government adds a Rs.20 levy on each cigarette it could collect an additional Rs.82 billion per year,” he said.

He added after imposing a Rs.20 tax on cigarettes the Government would able to collect a total of Rs.162 billion just from cigarette taxes.

“The Government should introduce new tax policies over cigarettes and other alcoholic products in order to collect more State revenue instead of imposing Value Added Tax (VAT) on essential goods,” he added. 

Gunawardene also alleged the Government was planning to outsource revenue collection to a private company, and condemning the move, urged the Finance Ministry to develop the Revenue Administration Management Information System (RAMIS) which was introduced during the previous regime. 

“RAMIS was introduced to improve the efficiency and accountability of the Inland Revenue Department. The Sri Lanka Customs and the Finance Ministry should also optimise revenue and fiscal efficiency and accountability via the system,” he said.

Gunawardena also said a majority of employees at the Inland Revenue Department have gone on sick leave to object against the Government efforts to privatise the revenue collection mechanism.