Cigarette production falls 32% amid tax hikes
by Saman Indrajith Cigarette production in Sri Lanka has dropped by 32% over the past three years following successive increases in taxes on tobacco products, Deputy Minister of Economic Development Nishantha Jayaweera told Parliament yesterday (20). Responding to a question raised by Kurunegala District SJB MP Dayasiri Jayasekara, Jayaweera said cigarette production had declined from […]
Cigarette production in Sri Lanka has plummeted by 32% over the last three years due to successive tax hikes on tobacco products, according to Deputy Minister of Economic Development Nishantha Jayaweera. In a recent speech to Parliament, Jayeweera revealed that production fell from 2.8 billion sticks in 2022 to just 1.9 billion sticks in 2025.
He explained that the government's approach to tobacco taxation aims to generate more revenue for the state, curb healthcare costs related to smoking, and mitigate the broader socio-economic impacts of tobacco use. Excise duties on cigarettes have been raised four times since 2023, with each increase ranging between 14% and 20%.
VAT was also raised from 15% to 18% in January 2024, while the corporate income tax rate was increased from 40% to 45% as of April 2025. The present excise duty structure, effective from January 11, 2025, takes into account the length of the cigarette. Jayaweera noted that these higher tobacco taxes have led to a steady rise in both direct and indirect tax revenue, helping the government achieve its objectives of safeguarding public health and enhancing revenue management.
Written by urgent.news from The Island Sri Lanka's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
