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Wijeyadasa to propose fine hike for illicit cigarettes

By Sumudu Chamara

 

Sri Lanka Podujana Peramuna (SLPP) MP Dr. Wijeyadasa Rajapakshe plans to table a Private Member’s Bill in Parliament, proposing an increase in the fine imposed on illegally imported cigarettes of up to three times the value of such smuggled stocks.

According to the existing laws, the maximum fine that can be imposed for importing cigarettes illegally is Rs. 800,000, irrespective of the number of cigarettes imported, Dr. Rajapakshe said, adding that the illegal importation of cigarettes is a highly profitable racket.

“For example, importing cigarettes from China costs only around Rs. 1-2 per cigarette. One can earn up to Rs. 400 million by importing a 40-foot container full of cigarettes. The country loses a huge amount of tax revenue due to this,” he told The Morning yesterday (4).

National Authority on Tobacco and Alcohol (NATA) Chairman Dr. Samadhi Rajapaksa commended Dr. Rajapakshe’s proposal, saying that increasing fines for the illegal importation of cigarettes is necessary. He also emphasised that implementing the existing laws is as important as amending/introducing laws. He added that Sri Lanka must consider forming proper tax and fine policies to deal with this situation without delay.

Meanwhile, it was reported that NATA has appointed a sub-committee comprising experts in taxing, with the aim of introducing to Sri Lanka a more suitable tax policy before the next Budget, in accordance with World Health Organisation (WHO) guidelines.

Speaking to The Morning about Sri Lanka’s situation as far as the tobacco and alcohol industry is concerned, Dr. Samadhi Rajapaksa stressed that the revenue earned by the Government through taxing tobacco products outweighs the money spent to treat those falling ill due to consumption of tobacco and alcohol, and to deal with various social ills triggered by the same.

“Therefore, in reality, the Government does not profit from the tobacco industry,” he emphasised.

According to him, due to the smuggling of alcohol into the country, the Government suffers a loss of tax revenue of approximately Rs. 80 billion per year.