The Alcohol and Drug Information Center reveals that despite the increase in the price of cigarettes in the budget, the country is losing about 40 billion rupees in tax revenue per year due to the deals made by certain individuals with cigarette companies.
They point out that cigarette taxes should be increased, not cigarette prices.
Because of this, cigarette companies are making huge profits and are taking the money abroad
The Alcohol and Drug Information Center reveals that despite the increase in the price of cigarettes in the budget, the country is losing about 40 billion rupees in tax revenue per year due to the deals made by certain individuals with cigarette companies.
They point out that cigarette taxes should be increased, not cigarette prices.
Because of this, cigarette companies are making huge profits and are taking the money abroad
Pubudu Sumanasekara executive director of the Alcohol and Drug Information Centre (ADIC)He mentioned most of the time in our budget proposals we see they increase cigarette prices this is wrong approach what should be increased is not the price but the tax on the company. Because of these wrong tax policies the companies’ owners from Britain and America collect the money and dispatch them to their mother companies. Because the tax was not properly formulated and applied even today we lose a colossal amount closer to Rs. 40 billion.
Sampath Serem director human resources explained the normal sales of Rs. 4800 million today has come down to Rs. 2200 million which is more than 50% drop but, the irony of this is sales drops but the cigarette companies profits increase. The rate of increase if calculated reveal that percentage is staggering 600 –to 700 percent.
How such huge profits can be earned! Finance minister say they increase tax by certain amount. When tax increase by Rs 10/- they increase the price by Rs 20 and the government receive an increase tax of Rs 10. They retain another Rs 10 with them.He elaborated this loos income at time not felt for e.g. 40 billion in to 3 times is billion 120. If a proper tax formula is in place we would get 120 billion in three years. What a lot we could do with this.!
