Alcohol formula

Low taxes on tobacco and alcohol in a context of high food inflation? Sajith Matters

COLOMBO (News 1st) – Opposition leader Sajith Premadasa has questioned the government on the reason for imposing low taxes on tobacco and alcohol at a time of rapidly rising food inflation in the country.

Speaking in Parliament, the Leader of the Opposition said the country’s food inflation rate is over 90%, but the inflation rate for tobacco and alcohol products is only more than 36%, and asked why the government was not taking action to increase the price. such goods.

He alleged that ties between liquor companies, politicians and Treasury officials have kept prices low without being subject to increases.

In response, the Minister of State for Finance, Ranjith Siyambalapitiya, said that excise duty on tobacco products is levied on a unit basis depending on the length of the product, while excise duty is levied on alcoholic products according to their strength.

He added that in addition to these excise duties, a value added tax of 15% VAT on sales will be levied from October 1, as well as a social contribution of 2.5% on the turnover. ‘business.

“Furthermore, these cigarettes and liquor were subject to an increased income tax rate of 40%. Investigations are underway into the work needed to create a new tax regime on cigarettes and liquor. as well,” the minister said.

He added that the Ministry of Finance is ready to achieve this goal of a new taxation system in the near future with a simple and clear index instead of a more complicated price formula.

The Leader of the Opposition called for a proper timeline to be presented on the issue instead of repeating the words ‘near future’.

MP Rajitha Senaratne raised the issue of 40,000 deaths a year in Sri Lanka due to smoking, and in the past a 90% tax was levied on tobacco. He alleged that the Treasury opposes the decision to levy higher taxes on tobacco products.

Recent news