Health Minister Dr. Rajitha Senaratne yesterday outlined plans to bring in a new proposal to increase taxes of cigarettes to 90% of their purchase price, in what he described as an attempt to reduce smoking in the country.
Dr. Senaratne in his capacity as the Cabinet Spokesman told reporters that he would draft a Cabinet paper to increase taxes on cigarettes from the present 67%-72% to 90% of purchase price.
Such a move would likely result in tobacco companies increasing their prices as well.
“I feel very strong about this measure and feel that the people of Sri Lanka would benefit from such a step. All the money raised from these taxes will be directly used for public healthcare services,” he said.
The Health Minister also defended the increase of VAT on private healthcare, insisting that the Government plans to make all outpatient costs even at private hospitals free of VAT and revert to the previous system.
Responding to questions over inconsistent Government policies Dr. Senaratne insisted the ‘Yahapalanaya’ establishment was one that “listens to the people,” and called for more transparency in the Budget formulation process.
“The detailed clauses of the Budget are not presented to Cabinet members. We are simply given a policy outline. Ministers also hear the full Budget when it is presented in Parliament by the Finance Minister. This is why there are debates on the Budget before it is passed. But under the previous Government, the President was also the Finance Minister so the space for dissent was limited. In this Government there is space for discussion and change. That is how it should be,” he said.
In the first half of 2015 Ceylon Tobacco Company (CTC) contributed Rs. 43.7 billion to the Government as excise and other taxes. This is an increase of 18% in comparison to the same period last year and was primarily driven by an excise-led price increase experienced in October 2014 along with higher volumes during the first six months of 2015. The price increases announced ahead of the 2016 Budget was expected to deliver 10% more revenue to the Government.
Responding to questions the Cabinet Spokesman was also confident Prime Minister Ranil Wickremesinghe would stick to a statement made when he met civil society activities over the weekend to remove Central Bank Governor Arjuna Mahendran.
Dr. Senaratne in his capacity as the Cabinet Spokesman told reporters that he would draft a Cabinet paper to increase taxes on cigarettes from the present 67%-72% to 90% of purchase price.
Such a move would likely result in tobacco companies increasing their prices as well.
“I feel very strong about this measure and feel that the people of Sri Lanka would benefit from such a step. All the money raised from these taxes will be directly used for public healthcare services,” he said.
The Health Minister also defended the increase of VAT on private healthcare, insisting that the Government plans to make all outpatient costs even at private hospitals free of VAT and revert to the previous system.
Responding to questions over inconsistent Government policies Dr. Senaratne insisted the ‘Yahapalanaya’ establishment was one that “listens to the people,” and called for more transparency in the Budget formulation process.
“The detailed clauses of the Budget are not presented to Cabinet members. We are simply given a policy outline. Ministers also hear the full Budget when it is presented in Parliament by the Finance Minister. This is why there are debates on the Budget before it is passed. But under the previous Government, the President was also the Finance Minister so the space for dissent was limited. In this Government there is space for discussion and change. That is how it should be,” he said.
In the first half of 2015 Ceylon Tobacco Company (CTC) contributed Rs. 43.7 billion to the Government as excise and other taxes. This is an increase of 18% in comparison to the same period last year and was primarily driven by an excise-led price increase experienced in October 2014 along with higher volumes during the first six months of 2015. The price increases announced ahead of the 2016 Budget was expected to deliver 10% more revenue to the Government.
Responding to questions the Cabinet Spokesman was also confident Prime Minister Ranil Wickremesinghe would stick to a statement made when he met civil society activities over the weekend to remove Central Bank Governor Arjuna Mahendran.
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