Taxes imposed on vices, or what are generally referred to as “sin taxes”, were a notable feature of Budget 2019, with alcohol, beer, cigarettes, and casinos set to become a lot more expensive. Unlike the 2018 Budget which reduced excise taxes on strong beer by 33% to drive consumers towards beer from hard liquor, even beer has not been spared in the Budget 2019. Excise duty imposed on locally manufactured liquor was increased by 8% with effect from 6 March 2019 based on indexation, where the minimum annual duty increase is according to an index capturing annual inflation and income growth. Accordingly, the price of a litre of country-made foreign liquor was increased to Rs. 3,550 from Rs. 3,300 while Special Arrack remains unchanged at Rs. 3,300 per litre. Prices of other arracks were increased to Rs. 3,550 per litre from Rs. 3,300 and local wine was increased to Rs. 600 per absolute litre from Rs. 100 per bulk litre. Meanwhile, imported wine will be subject to Rs. 110 of excise duty per litre while other imported liquors will be subjected to Rs. 215 per bulk litre. The Distilleries Company of Sri Lanka (DCSL) expressed displeasure with the proposals as over a month ago it raised the prices of its arrack products due to the increased cost of production brought about by the depreciation of the rupee. An official from DCSL who preferred to remain anonymous said that the company expected these tax revisions to have a negative impact on its sales which has already witnessed a considerable drop due to the recent beer price reduction. The official added that making liquor unaffordable to the public through increasing taxes would harm the revenue of the Government received through established distilleries as people will tend to go towards affordable illicit brews in the market. DCSL increased the price of a bottle of arrack by Rs.10 and the price of a quarter-bottle by Rs.20 while a half-bottle of Special Arrack has been decreased by Rs.20. Meanwhile, malt liquor (beer) was increased by 12% based on the index capturing annual inflation and income growth. Accordingly, prices of both beer less than 5% alcohol and beer more than 5% alcohol were increased to Rs. 2,700 per litre from Rs. 2,400 while imported beer is subject to an excise duty of Rs. 55 per bulk litre. The 2018 Budget reduced excise taxes on strong beer by 33% and raised it on hard liquor by 2%, effective immediately. The Budget also introduced a Nation Building Tax (NBT) of 2% on all alcoholic beverage sales with effect from April 2018. The excise duty on cigarettes more than 60mm were increased by 12% with effect from the very next day of the Budget, resulting in an increase of Rs. 5 per stick. Accordingly, sticks between 60-67mm will be taxed an excise duty of Rs. 19,500 per 1,000 sticks, sticks between 67-72mm Rs. 23,000 per 1,000 sticks, sticks between 72-84mm Rs. 37,580 per 1,000 sticks, and sticks above 84mm Rs. 42,200 per 1,000 sticks. Excise duty on cigarettes will now be based on indexation with a minimum annual duty increase capturing annual inflation and GDP growth. This will ensure revenue protection and control affordability. However, the NBT which is imposed on manufacturers of cigarettes will become effective from 1 June 2019. The cess duty on importation of tendu leaves (beedie leaves) was also increased from Rs. 2,500 to Rs. 3,500 per kg, effective from 6 March 2019. In August last year, the Ministry of Finance increased the excise tax imposed on cigarettes by Rs. 3.80 with immediate effect. The price of a cigarette was increased by Rs. 5 and it was sold at Rs. 55 while cigarettes priced at Rs. 55 were sold at Rs 60. Furthermore, the license fees of casinos have been increased from Rs. 200 million to Rs. 400 million per annum and for rudjino games it has been increased to Rs. 1,000,000 per annum. The Casino Turnover Levy is set to be charged at 15%. These new charges will be effective from 1 April 2019. Meanwhile, the casino entrance fee has been revised to $ 50 per person to be charged from 1 June 2019.