Sri Lanka loses Rs. 9.4bn in tobacco tax revenue amid shifting market trends - report (opens original article in a new tab)

Sri Lanka lost Rs. 9.4 billion in tobacco tax revenue in 2024 due to shifts in cigarette brand market shares following a 20% tax increase in 2023, with tobacco companies maintaining profits as consumers switched to cheaper brands, while tax adjustments lagged behind rising production costs.

• Sri Lanka lost Rs. 9.4 billion in tobacco tax revenue in 2024 due to changes in cigarette brand market shares after a 20% tax increase in 2023
• Tobacco companies maintained or increased profits as consumers switched to cheaper brands, reducing the tax policy's effectiveness
• Cigarette production rose by 5% in 2025 despite slower tax adjustments, reversing a previous decline in production
• Tobacco tax as a share of cigarette retail price fell from 74% in 2023 to 68.8% in 2024, below WHO recommendations