Cigarette smuggling booming in Sri Lanka owing to high taxes

Sunday, 9 September 2018

Cigarette smuggling is booming in Sri Lanka owing to high taxes, the Research Intelligence Unit (RIU) said.

RIU said that with Sri Lanka having one of the highest cigarette prices in the region it has led the country into the hands of illegal cigarette smugglers who make huge profits.

This trend consistent tax hikes from 2009- 2015 have since given way to large and unprecedented hike in 2016 which hampered the objectives of both the Ministry of Health and the Ministry of Finance.

High taxes play a significant role in incentivising the smuggling of cigarettes, the Research Intelligence Unit’s 2018 report on Towards Sensible Policy Reforms to Combat Illicit Tobacco Markets said.