Efforts by Sri Lankan law enforcement authorities to minimize the presence of illicit cigarettes in the local market have assisted in delivering a higher revenue base for the government with 1,190 raids been conducted to date and 69 million cigarettes being confiscated to the value of Rs.1 billion.
According to a press release from Ceylon Tobacco Company (CTC), government revenue from CTC (comprising all Levies, Duties and Taxes) for the nine months ended 30 September 2009 increased by Rs.2.6 billion to Rs.36.3 billion due to excise-led price increases and an improved brand mix. Provincial Council Tax also grew by Rs.130 million to Rs.2.3 billion.
However, the press release stated that CTC volumes continued to decline due to the higher excise-led price increases and lower consumer affordability.
Still, aggressive cost management initiatives within all areas of the organization led to a significant reduction in operating expenses and contributed to the profit after tax growth of Rs.597 million for the period, offsetting the impact of higher tobacco leaf prices and declining volumes.