NATA wants price of cigarettes increased annually by six percent

By Rathindra Kuruwita

The National Authority on Tobacco and Alcohol (NATA) said yesterday that it would introduce a tax formula which would lead to an annual increase of 6 percent in cigarette prices.

Dr. Samadhi Rajapaksa, Chairman, NATA, said that the NATA was also planning to make it difficult for people to purchase cigarettes.

“This will reduce the ability to buy cigarettes. When this is implanted, the smoking prevalence – 9.1% among men – will drop to around 6%,” he said.

Dr. Rajapaksa mentioned that the proposed tax formula consisted of six separate components––Cigarette Tax Percentage, proposed Price for next year, inflation, present Price, GDP, and the externality factor of 4%.

“The 4% is added to ensure that the price of a cigarette is increased every year even if inflation drops to zero. There are many myths about the tax revenue of cigarettes and alcohol. Many people believe that the State depends heavily on these taxes. This is not true, our tax revenue from these sources is about 11% only,” the NATA Chairman said.

“Given the sheer amount of misinformation about tax revenue, even the most senior policy-makers and ministers believe this. Thus, the media must collaborate with NATA to set the record straight.”

Dr. Rajapaksa earlier said that the NATA would increase the minimum age for sale, purchase and promotion of tobacco products from 21 to 24, in 2022.

Rajapaksa told the media that NATA had decided to amend the National Authority on Tobacco and Alcohol Act this year.

The increase of the minimum age for sale, purchase and promotion of tobacco products was one of the proposed amendments to the Act, he said.

“Already advertising, promotion and sponsorship of tobacco is prohibited. We want to stop the cross border advertising of tobacco products, too,” he said.