Business
Sri Lanka’s battle against NCDs: Is the Sugar-Beverage Tax doing enough?
Continued from yesterday
Priyanka
Jayawardena
Examining the timeline of SSB tax implementation in Sri Lanka reveals interesting insights. Initially set at 50 cents per gram (c/g) of sugar in 2017, the tax rate has changed, being subsequently reduced to 30 (c/g) per gram. This ad-hoc approach to adjusting tax rates has not accounted for inflation, potentially diluting the tax’s intended impact over time.
Is SSB Tax Effective in Sri Lanka?
Price elasticity of demand measures how responsive consumers are to changes in price. Thus, understanding the price elasticity of SSBs in Sri Lanka can help predict the impact of the tax. In the context of the SSB tax, the IPS study finds that soft and fruit drinks exhibit a high level of price sensitivity, indicating that consumers are more likely to change their consumption behaviour when prices change.
The study reveals that a 10% price increase is associated with a remarkable reduction in the quantity of soft drinks (32% drop) and fruit drinks (18% drop). This finding underscores the tangible impact of the SSB tax on consumption habits, aligning with the initial intent of the tax – i.e., to lower the consumption of these unhealthy beverages.
While the SSB tax’s positive effects are evident, a nuanced trend merits attention. The study highlights that the potential effect of the tax has somewhat diminished over time. For instance, in 2019, people did not respond as strongly to price changes when buying soft drinks compared to 2016. This implies that when the price of soft drinks increased, it did not affect people’s buying habits as much in 2019 as it did in 2016. This could be due to the prices of other products rising to a higher level or because people’s purchasing power had improved. Additionally, the price sensitivity of fruit drinks remained relatively stagnant between 2016 and 2019. This intriguing finding indicates that while the tax had a significant initial impact on consumption patterns, this impact might be gradually waning.
The critical factor contributing to this trend is the lack of adjustment of SSB tax rates to account for inflation. Unlike other excise taxes that adapt over time, the SSB tax rates in Sri Lanka have not been regularly updated in response to changing economic conditions. Instead, adjustments have been made on an ad-hoc basis. Sri Lanka’s recent bout of spiraling inflation would have further eroded the ‘real’ tax substantially.
Benefits of Effective SSB Taxation
The introduction of SSB taxes in Sri Lanka reflects a commitment to tackling the alarming rise of NCDs. However, the real impact of such taxes can be compromised by inflation and insufficient adjustments over time. For these policies to achieve their intended goals, it is imperative to implement tax rates that factor in economic changes and maintain their potency in discouraging SSB consumption.
By adopting a comprehensive and adaptive approach, Sri Lanka can significantly improve public health outcomes and curb the NCD burden.
Policymakers should consider a proactive and data-driven approach to achieve meaningful reductions in SSB consumption through effective SSB taxes. Regular reviews of the tax rate, aligned with inflation and income growth, can help ensure that the tax remains a potent tool for promoting healthier dietary choices and combatting NCDs.
Furthermore, imposing a tax on unhealthy products such as SSBs will support the government’s continuous efforts to generate revenue without increasing the costs of essential goods at a critical time for the economy.
The Delegation of German Industry and Commerce in Sri Lanka (AHK Sri Lanka) proudly facilitated the first-ever Sri Lankan delegation’s participation at Drupa 2024, the world’s largest trade fair for the printing industry and technology. Held after an eight-year hiatus, Drupa 2024 was a landmark event, marking significant advancements and opportunities in the global printing industry.
AHK Sri Lanka played a pivotal role in organising and supporting the delegation, which comprised 17 members from the Sri Lanka Association for Printers (SLAP), representing eight companies from the commercial, newspaper, stationery printing, and packaging industries. This pioneering effort by AHK Sri Lanka not only showcased the diverse capabilities of Sri Lanka’s printing sector but also facilitated vital bilateral discussions with key stakeholders from the German printing industry.
Business
Unveiling Ayugiri: Browns Hotels & Resorts sets the stage for a new era in luxury Ayurveda Wellness
In a captivating reimagining of luxury wellness tourism, Browns Hotels & Resorts proudly unveiled the exquisite Ayugiri Ayurveda Wellness Resort Sigiriya. This momentous occasion, celebrated amidst a vibrant and serene grand opening on the 6th of June, heralds a new chapter in the Ayurveda wellness tourism landscape in Sri Lanka. Nestled amidst 54 acres of unspoiled natural splendour, Ayugiri features 22 exclusive suites and stands out as the only luxury Ayurveda wellness resort in the country offering plunge pools in every room, rendering it truly one-of-a-kind.
The grand opening of Ayugiri Ayurveda Wellness Resort was an enchanting event, where guests were captivated by the melodies of flutists and violinists resonating through Sigiriya’s lush landscapes. As traditional drummers and dancers infused the air with vibrant energy, Browns Hotels & Resorts’ CEO, Eksath Wijeratne, Kotaro Katsuki, Acting Ambassador for the Embassy of Japan and General Manager, Buwaneka Bandara, unveiled the resort’s new logo, marking a significant moment witnessed by distinguished guests from the French Embassy, Ayurveda and wellness enthusiasts along with officials from the Sigiriya area, LOLC Holdings and Browns Group.
“Our strategic expansion into wellness tourism with Ayugiri Ayurveda Wellness Resort Sigiriya symbolises a significant milestone for Browns Hotels & Resorts. Wellness tourism has consistently outperformed the overall tourism industry for over a decade, reflecting a growing global interest in travel that goes beyond leisure to offer rejuvenation and holistic well-being. By integrating the timeless wisdom of Ayurveda with modern luxury, we aim to set a new standard in luxury wellness tourism in Sri Lanka. Whether your goal is prevention, healing, or a deeper connection to inner harmony, Ayugiri offers a sanctuary for holistic well-being” stated Eksath Wijeratne.
Ayugiri encapsulates the essence of life, inspired by the lotus flower held by the graceful queens of the infamous Sigiriya frescoes. Just as the lotus emerges from the murky depths, untainted and serene,
Ayugiri invites guests on a journey of purity and rejuvenation, harmonised with a balance of mind, body and spirit, the essence of nature, echoes of culture and the wisdom of ancient Ayurvedic healing.
HNB General Insurance, one of Sri Lanka’s leading general insurance providers, has been honored as the Best General Bancassurance Provider in Sri Lanka 2024 by the prestigious Global Banking and Finance Review – UK.
The esteemed accolade underscores HNB General Insurance’s unwavering commitment to excellence and its outstanding performance in the field of bancassurance. Through dedication and hard work, the HNB General Insurance team has continuously endeavored to deliver innovative insurance solutions, cultivate strong relationships with banking partners, and provide unparalleled service to customers nationwide. This recognition is a testament to the team’s dedication and relentless pursuit of excellence in the bancassurance business.
“We are honored to receive this prestigious award, which reflects our team’s tireless efforts and dedication to delivering value-added insurance solutions and exceptional service through our bancassurance partnerships,” said Sithumina Jayasundara, CEO of HNB General Insurance. “This recognition reaffirms our position as a trusted insurance provider in Sri Lanka and motivates us to continue striving for excellence in serving our customers and communities.”
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