The Alcohol and Drug Information Centre (ADIC) has highlighted a significant development in Sri Lanka’s battle against alcohol and tobacco consumption. According to ADIC, a 20% increase in excise taxes on alcohol last year resulted in a dramatic 8.3 million litre drop in alcohol consumption. At the same time, the move contributed an impressive Rs. 11.6 billion to government revenue.
ADIC Executive Director, Sampath de Seram, expressed support for this tax hike, stating that it was a crucial step towards reducing public health risks. He explained that such measures align with recommendations from the World Health Organization (WHO), aiming to curb unhealthy habits like excessive drinking and smoking.
“This latest step is beneficial in two ways,” de Seram commented, emphasizing that higher taxes not only reduce consumption but also boost state revenue substantially.
The impact was also evident in cigarette sales, which saw a sharp decline of 521.5 million units last year. Despite this reduction, tax revenue from cigarettes increased by Rs. 7.7 billion, underscoring the dual benefits of excise tax hikes in the country.
However, de Seram cautioned that such initiatives should be implemented scientifically, taking into account inflation and other economic factors to ensure long-term effectiveness.