Financial Times

CTC boosts state revenue from tobacco taxes

The government recorded a 16 percent increase of Rs 3 billion in revenue for the first six months ending 30th June 2006, mainly attributed to the excise led price increases in 2005 and declining volumes of illegal and counterfeit products in the local market, the Ceylon Tobacco Company said.

In a press release, CTC said state revenue from the tobacco industry has grown from Rs 15 billion during the six months ended 30th June 2005 to Rs18 billion during the same period 2006.

“The growth of 16 percent in government revenue in the first six months comes in the wake of massive raids and detections carried out by Customs, Excise officials and Police to minimise the availability of counterfeit and illegal cigarettes.

The estimated volumes of these illegal products mainly “Gold Seal” have seen a decline during the period under review.

With a total of 320 raids conducted by the authorities, over 20 million cigarettes have been confiscated with fines amounting to Rs 5.5 million,” it said.

CTC’s Finance Director Sandeep de Alwis said, “the illegal cigarette trade has been a lucrative business in the country due to the high taxes levied by the government.

The illegal players however are now finding it difficult to smuggle products into the country due to high vigilance and effective raids carried out by the authorities.

This has enabled CTC to contribute more towards government revenue in the first half of the year amounting to an increase of 16 percent. The boost in government revenue is also attributed to; two excise led price increases by the government in November and December 2005”.

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