Cigarette production falls by 32 per cent in the country: Deputy Minister Nishantha

23-Aug-2026

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Cigarette production in the country had declined by 32 per cent by 2025 as a result of tax revisions imposed on tobacco products from 2022 onwards, Deputy Minister of Economic Development Nishantha Jayaweera said.

He was responding to questions raised by United People’s Power Kurunegala District MP Dayasiri Jayasekara during Question Time in Parliament on August 20.

He further said:

“Cigarette production, which stood at 2.8 billion in 2022, declined to 1.9 billion by 2025 due to changes in tax policy. The primary objective of this policy is not merely to generate Government revenue, but to control healthcare expenditure and other socio-economic negative impacts arising from tobacco consumption.

“Since 2023, excise duties, Value Added Tax and corporate income tax have been revised on four occasions. Excise duties were increased by 20 per cent on January 1 and July 1, 2023, respectively.

“In January 2024, excise duty was increased by 14 per cent under the inflation index mechanism.

“On January 11, 2025, excise duty was increased by 5.9 per cent. On January 1, 2024, VAT was increased from 15 per cent to 18 per cent.

“On April 1, 2025, corporate income tax was increased from 40 per cent to 45 per cent. The increase in taxes has resulted in growth in both direct and indirect tax revenue. It has also contributed to protecting public health and managing Government revenue,” he said.