Officials of the Finance Ministry presented the steps taken to increase excise duty on cigarettes before the Committee on Public Finance coming under the Order under Section 3 of the Excise (Special Provisions) Act, No. 13 of 1989.
The officials of the Ministry of Finance made this presentation during the meeting of the Committee on Public Finance held on 11.03.2025 in Parliament, chaired by (Dr.) Harsha de Silva, Hon. Member of Parliament.
The Committee stated that the increase in the excise duty on cigarettes cannot be approved without concrete data and emphasized the need for justification regarding the steps taken to increase the excise duty on cigarettes at the previous Committee meeting held. Accordingly, it was also pointed out that studies conducted on excise revenue from cigarettes indicate that this calculation method has led to a decline in government revenue while increasing the profits of particular manufacturing companies. Therefore, the importance of ensuring that this tax revision would indeed be beneficial to government revenue was emphasized and consequently, was decided to reconsider following further clarifications from officials of the Ministry of Finance, regarding the excise duty increase.
Accordingly, following a discussion held at length, the Committee approved the Order under Section 3 of the Excise (Special Provisions) Act, No. 13 of 1989.
Two Orders under the Special Commodity Levy Act, No. 48 of 2007 were also taken into consideration following which, approval was given.
Accordingly, Order under Section 5 of Special Commodity Levy Act, No. 48 of 2007 published in the Gazette Extraordinary No. 2417/20 sought to further extend the period of validity of the Special Levy that had already been imposed on 63 commodities including essential food items at the same rates after obtaining recommendations from the relevant line ministries. The Order under Section 5 of Special Commodity Levy Act, No. 48 of 2007 published in the Gazette Extraordinary No. 2421/03 sought to grant tax concessions for the dates imported to be distributed free of charge during Ramadan fasting period.
The Committee on Public Finance also took into consideration the protocol amending the Section 28(6) of the Agreement between the governments of Sri Lanka and the government of India for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes in income which was signed at the government level in India, on 16th December 2024 and approved the same.
This meeting was attended by Hon. Deputy Ministers (Dr.) Harshana Suriyapperuma and along with Hon. Members of Parliament Ravi Karunanayake, (Dr.) Kaushalya Ariyaratne, Wijesiri Basnayake, Arkam Ilyas, Nimal Palihena, and) Lakmali Hemachandra, (Attorney-at-Law).