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Friday July 12th, 2024

Sri Lanka cigarette taxes down amid legal sales fall in 2024 March quarter

ECONOMYNEXT – Sri Lanka’s Ceylon Tobacco Company said its March quarter cigarette sales were down from a year earlier, leading to an absolute revenue fall as well amid tax hikes and an economic slowdown.

Revenue in the March 2024 quarter fell to 45.85 billion rupees, down from 46.93 billion rupees last year.

Turnover linked taxes fell to 31.7 billion rupees from 34.2 billion rupees.

“The Company’s sales volume during the three months ended 31st March 2024 was lower in comparison to the same period last year, mainly due to the tax led price increases in line with the Government’s revenue proposals,” CTC told shareholders in the interim accounts.

Tax revenues were almost the same as the September 23 quarter, but sharply down from the December 2023 quarter, where there was a pick-up in sales.

CTC in the past has said there was a shift to beedi as well as rise in smuggling due to tax hikes.

For many years it has been claimed that the demand for cigarettes was inelastic and a fall in sales would be compensated by higher tax revenues.

However, either due to faster fall in actual consumption, or a shift to other products tax revenues are down from a year earlier.

Cigarette consumption lead to cancer and other diseases, but the objective will not be achieved if there is a shift to alternative non-taxed products.

CTC reported profits of 6.8 billion rupees for the quarter, up from 5.999 billion last year. There was a reduction in some costs, though wages and raw material costs were up.

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Sri Lanka appoints new Attorney General

ECONOMYNEXT – Sri Lanka’s President Ranil Wickremesinghe has appointed K A Parinda Ranasinghe PC as Attorney General.

He was appointed in terms of Article 61E (b) of the Constitution of Sri Lanka, the president’s media division said.

The new AG received the appointment from President Wickremesinghe at the Presidential Secretariat on Friday.

He fills the post after the retirement of former Attorney General Sanjay Rajaratnam. (Colombo/Jul12/2024)

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Sri Lanka rupee closes stronger at 301.70/302.00 to US dollar

ECONOMYNEXT – Sri Lanka’s rupee closed stronger at 301.70/302.00 to the US dollar on Friday, from 302.80/303.00 to the US dollar on Thursday, dealers said, while bond yields were up.

A bond maturing on 15.12.2026 closed at 10.90/11.00 percent, up from 10.85/95 percent.

A bond maturing on 15.12.2027 closed at 11.75/80 percent, up from 11.80/88 percent.

A bond maturing on 01.05.2028 closed at 11.90/12.00 percent.

A bond maturing on 15.09.2029 closed at 12.10/30 percent, up from 12.15/25 percent. (Colombo/Jul12/2024)

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Sri Lanka stocks close up, muted activity

ECONOMYNEXT – The Colombo Stock Exchange closed up on Friday, data on its site showed.

The broader All Share Index closed up 0.35 percent, or 41.71 points, at 11,843; while the more liquid S&P SL20 Index closed up 0.56 percent, or 19.20 points, at 3,454.

Turnover was low at 653 million.

“The market picked up a bit from yesterday but it’s still below the psychological 12,000 mark,” Softlogic Stockbrokers said.

“Local retail participation drove the market predominantly.”

John Keells Holdings Plc brought in Rs109mn to the turnover, and the share closed flat at 194.50.

Melstacorp Plc contributed in Rs104mn to the turnover, and the share closed flat at 85.00.

Sentiment around the banking counters was mostly negative. Sampath Bank Plc closed down at 77.00, closed flat at 101.25, and Hatton National Bank Plc closed flat at 195.25.

The top contributors to the ASPI were Commercial Bank of Ceylon Plc (up at 103.50), Bukit Darah Plc (up at 397.00), and Hayleys Plc (up at 101.00).

Foreign participation remained low as well. There was a higher net foreign outflow of 101 million.

“Foreign selling was seen on John Keells Holdings, and banking counters; Hatton National Bank Plc (down at 195.00), Pan Asia Banking Corporation Plc (down at 20.70), and Commercial Bank of Ceylon Plc.

There was selective foreing interest on the diversified financials sector, particularly in companies that had vehicle leasing portfolios. “We think this might be due to the news of the vehicle import ban possibly ending.”

LOLC Holdings Plc closed up at 440.50, People’s Leasing and Finance Plc closed up at 12.20.

Softlogic Holdings Plc which announced the date of its rights issue, closed up at 8.50. (Colombo/Jul12/2024)

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