News
Cigarette production falls 32% amid tax hikes
by Saman Indrajith
Cigarette production in Sri Lanka has dropped by 32% over the past three years following successive increases in taxes on tobacco products, Deputy Minister of Economic Development Nishantha Jayaweera told Parliament yesterday (20).
Responding to a question raised by Kurunegala District SJB MP Dayasiri Jayasekara, Jayaweera said cigarette production had declined from 2.8 billion sticks in 2022 to 1.9 billion in 2025.
He said the Government’s tobacco taxation policy was aimed not only at increasing State revenue but also at reducing healthcare costs associated with tobacco use and addressing its wider socio-economic impact.
Excise duties on cigarettes have been increased four times since 2023. The duty was raised by 20% on January 1, 2023, and by a further 20% on July 1 that year. It was increased by 14% on January 1, 2024, under the inflation indexation mechanism, and by another 5.9% on January 11, 2025.
Meanwhile, VAT was increased from 15% to 18% from January 1, 2024, while the corporate income tax rate was raised from 40% to 45% with effect from April 1, 2025.
The current excise duty structure, introduced on January 11, 2025, is based on cigarette length.Jayaweera said higher tobacco taxes had contributed to a gradual increase in direct and indirect tax revenue while supporting the government’s efforts to protect public health and improve revenue management.
News
Establishment of an Institutional Framework to Inagurate Upper Hydro Catchment Areas Management Authority
Policy approval of the Cabinet of Ministers was granted at their meeting held on 08.06.2026 to establish the Upper Hydro Catchment Areas Management Authority for identification and
execution of a formal and long – lasting remedy to secure the central hills including the upper hydro catchment areas enabling them to sustain amidst extreme weather conditions
due to natural calamities and human activities as well as to be used for the sustainable development of the country.
Accordingly, a concept paper has been prepared including
institutional structure, activities, powers, active subject area as well as administrative and coordination mechanism for the proposed authority by an expert technical committee appointed by the Secretary to the President.
Based on the said concept paper, the Cabinet of Ministers granted approval to the resolution furnished by the President to instruct the Legal Draftsman to prepare a draft bill including legal provisions required for the establishment of Upper Hydro Catchment Areas Management Authority.
News
Introduction of Flora and Fauna (Regulation of actions of the Indigenous Community within the nominated areas) Regulations
With the objective of securing the traditional livelihood and the eco system of the indigenous community, it has been recognized the necessity of introducing a formal regulation methodology to secure their engagement in livelihood activities by being more sensitive to the existing laws.
Thereby, the Fauna and Flora (regularizing) regulations under the Fauna and Flora Protection Ordinance (Authority 469) have been prepared so that nominated activities within the prescribed area to a member of the indigenous community
who has been registered for securing the rights acquired from law or custom or usage or traditional stance to execute an act within a certain state land that is fundamental to the survival of the indigenous community permission can be granted
Accordingly, the Cabinet of Ministers granted approval to the resolution furnished by the Minister of Environment to publish the said regulations in the government gazette notification and thereby submit to the Parliament for its concurrence.
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