At a juncture when government finances are tight, policy solutions such as taxing tobacco which can be leveraged to boost government revenue, without threatening economic growth, are essential. However, Sri Lanka’s 2021 Budget does not specify any tax increases on cigarettes. Instead, it proposes a simplification of taxes across a variety of sin goods and other goods. Details on how such a complex proposal is to be implemented across an array of industries are yet to be revealed. This blog dissects some of these issues pertaining to cigarette tax proposals in Budget 2021.
This blog gives a comprehensive analysis of the macroeconomic proposals of Sri Lanka’s Budget 2018.