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SLMA urges PM to hike taxes on tobacco and liquor
The Sri Lanka Medical Association (SLMA) yesterday wrote to Prime Minister and Minister of Finance, Ranil Wickremesinghe, urging him to follow the guidelines of World Bank (WB) and World Health Organisation (WHO) when determining taxation on tobacco and alcohol.
Given below is the letter sent to the Prime Minister by the medical body: “The SLMA wishes to place on record its appreciation of the current efforts to mitigate the unprecedented economic crisis in the country. As you would agree, both tobacco and alcohol cause enormous social, health and economic harms to Sri Lanka. The UNDP and WHO estimated that tobacco caused an economic loss of Rs. 214 billion in 2016, while the National Authority on Tobacco and Alcohol, WHO and the SLMA conducted a study using a very conservative methodology that estimated economic losses from alcohol to be Rs. 120 billion in 2015.
“Taxation analyses undertaken by the National Authority on Tobacco and Alcohol, as well as reputed research agencies, such as the Institute of Policy Studies and Verite Research, have shown the affordability of cigarettes (the number of cigarettes that can be purchased using per-capita GDP) has increased steadily over many years, while the percentage of tax derived from these products by the government has eroded due to unscientific and ad-hoc taxation policies.
“This is contrary to recommendations of agencies, such as the World Bank and WHO, that urge governments to regularly increase taxes to sustainably reduce the affordability of cigarettes which will increase government revenue and reduce consumption and thereby the harms to the population. Therefore, there is an urgent requirement to increase taxes and an opportunity to increase government revenue.
“In this respect, we wish to propose the following to improve the government income and reduce the outflow of foreign currency, in relation to tobacco and alcohol.
“1. Increase taxation of tobacco products using a technically sound formula that will align the taxation to inflation and minimize their affordability. Technical recommendations in this regard have been made by the National Authority on Tobacco and Alcohol, Institute of Policy Studies and Verite Research.
“2. Carry out an urgent review of current alcohol taxation policy and take steps to increase taxation in order to reduce its affordability as a means of increasing government revenue and decreasing its consumption and widespread harm.
“3. Consider both tobacco and alcohol products as the non-essential products, which they are. Therefore, steps need to be taken to:
“a. Discontinue all the duty-free concessions provided for sale of these products.
“b. Disallow imports of alcohol and tobacco products and products related to manufacture of such products. For example, ethanol, tobacco leaf, tendu leaf, chemicals, packing material and other products to limit outflows scarce foreign currency from the county.
“4. Remove tobacco and alcohol products that are in the basket of products that are used to track consumer price inflation to remove the effect of tax increases of these products on the inflation calculations.
“Public opinion polls have also repeatedly shown that such tax increases are the most popular tax increases. Currently, more than 90% of Sri Lankans do not smoke and more than 80% do not use alcohol regularly.
Both alcohol and tobacco industries will use their time-tested formula for preventing such measures – lobbying individuals and publishing flawed research claiming that increasing prices will increase tobacco smuggling and increase production of illicit alcohol. As you are aware, such arguments are made without basis or facts and are only intended to mislead policy makers. You would also agree that both tobacco smuggling and production of illicit alcohol are law enforcement issues, which cannot be prevented simply by competing in price.Therefore, we urge you to take on this issue as a priority national requirement that will help to mitigate the current and future negative impacts of the economic crisis in Sri Lanka, which will also improve the quality of life of the people of this country.”
News
Establishment of National Trade Negotiation Committee (NTFC) and Trade Policy Consultation Committee.
Approval has been granted at the cabinet meeting held on 24-08-2026 to implement the recommendations submitted by the committee appointed to review Sri Lanka’s current Free Trade Agreements and future course of Free Trade Agreements in Sri Lanka.
Taking into account these recommendations, it has been
recognized the necessity of establishing a National Trade Negotiation Committee and Trade Policy Consultation Committee enabling Sri Lanka to follow a more targeted, sequential, and evidence-based approach in conducting negotiations for Sri Lanka’s future Free Trade Agreements and to ensure a sustainable and meaningful stakeholder consultation process.
The Cabinet of Ministers has approved the resolution furnished by the Minister of Trade, Commercial, Food Security, and Cooperative Development to act as follows.
• Establishment of a National Trade Negotiation Committee to guide trade discussions conducted with potential bilateral or regional trade partners
• Appointment of the Secretary to the Ministry of Trade, Commerce, Food Security, and Cooperative Development as the Chairman of the National Trade Negotiation Committee and
the Chief National Trade Negotiator.
• Establishment of 12 subject specific sub- committees with the required technical working groups under the National Trade Negotiation Committee
• Appointment of Trade Policy Consultative Committee comprising of trade experts, researchers engaged in research relevant to trade field, business community, unions, civil societies and relevant public officers to instruct the National Trade Negotiation Committee on active and technical sectors, to submit the policy recommendations to the Cabinet of Ministers regarding the matters relevant to the trade agreements, to inquire sustainable ideas regarding the Free Trade Agreements, and to ensure the communication mechanism.
• The Minister in charge of the Subject international trade and the Minister in charge of the subject of Industry to serve as Co-Chairpersons of the Trade Policy Advisory Committee.
News
Justice Minister hits back at CLA
By Saman Indrajith
Justice Minister Harshana Nanayakkara yesterday told Parliament that the Commonwealth Lawyers’ Association (CLA) was not an organisation officially recognised or registered under the Commonwealth Secretariat, but a fee-levying private association.
Responding to a question by Opposition and SJB Leader Sajith Premadasa on why he had failed to meet CLA representatives, who recently visited Sri Lanka, Nanayakkara said he had offered them a date and time for a meeting, but they had been unable to attend.
The Commonwealth Lawyers Association (CLA) has questioned procedural fairness and other matters of concern in a report that deals with the Supreme Court hearing petitions against the 22nd Amendment to the Constitution. Among the issues raised by CLA President Steven Thiru, is the composition of the five-member bench.
The Minister said the CLA representatives subsequently requested another date, but he had already scheduled official engagements for the proposed day.
Nanayakkara said it was, therefore, incorrect to claim that he had refused to meet the CLA delegation.
“The CLA is not an official body accepted or admitted into the Commonwealth of countries. It is a private club whose members pay fees for membership,” he said.
However, the Minister said he was not suggesting that the organisation was “a bad organisation”, adding that the accuracy of several statements made by CLA members during their visit to Sri Lanka had yet to be established.
Nanayakkara identified lawyer Upul Jayasuriya as the CLA’s local representative and said Jayasuriya had sought a meeting with him.
“I gave him the opportunity, but he came up with the excuse that he could not make it as he was not in Colombo. Therefore, it is wrong to state that I did not give them time,” the Minister said.
News
First visit by an Indian Defence Minister since IPKF deployment
By Shamindra Ferdinando
Indian Defence Minister Rajnath Singh is in Colombo on a three-day official visit, the first by an Indian Defence Minister since the 1988 visit by K.C. Pant, during Rajiv Gandhi’s tenure as the Prime Minister.
The Indian Defence Ministry declared that the visit would further strengthen the traditionally strong and friendly bilateral relations in mutually beneficial areas, including a strong maritime and defence partnership.
The visit takes place in the wake of Sri Lanka and India signing seven MoUs, including one on defence, in April 2025. Communist Party General Secretary Dr. G. Weerasinghe told The Island that the government should set the record straight regarding the rapidly developing military relations with the US and India. The acquisition of Colombo Dockyard Ltd., by Indian Defence Ministry-run Mazagon Dock Shipbuilders Limited, soon after the finalisation of MoUs, underscored New Delhi’s strategy, Dr. Weerasinghe said. Responding to another query, Dr. Weerasinghe said that the government should take this opportunity to discuss the Tamil Nadu fishing fleet poaching on Sri Lankan waters.
Pant visited during the Indian Army operations against the Liberation Tigers of Tamil Eelam (LTTE) in the Northern and Eastern Provinces here, while Pranab Mukherjee visited Colombo, in August 2005, to pay last respects to assassinated Foreign Minister Lakshman Kadirgamar.
Indian and Sri Lanka governments said that the visit was meant to strengthen cooperation between the two neighbouring countries in the fields of defence, economic engagement, maritime affairs and regional security.
An Indian warship arrived at the Colombo harbour ahead of the Defence Minister’s visit, reminiscent of old gunboat diplomacy. INS Udayagiri’s visit coincided with the Defence Minister’s visit. The Defence Minister’s delegation included senior officials from Ministry of External Affairs.
During the visit, the Indian Defence Minister is scheduled to hold high-level discussions with President Anura Kumara Dissanayake who also holds the Defence portfolio, Prime Minister Dr. Harini Amarasuriya and Defence Secretary Sampath Thuyacontha. He is also expected to meet members of the Indian community, residing in Colombo.
Dr. Weerasinghe said that the NPP government conveniently extended the moratorium on foreign research vessels imposed during Ranil Wickremesinghe’s tenure in 2024. The CP official said that the media alleged that that decision was taken at the behest of the US and India but nearly two years after the last presidential election the ban remains.
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