Sri Lanka sugar tax to hit beverage firms
ECONOMYNEXT – The Sri Lankan government’s decision to impose a tax on sugar content on beverages is likely to affect the profitability of listed companies selling sweetened drinks, an analysis by a brokerage said.
The government’s 2018 budget presented to parliament Thursday by Finance Minister Mangala Samaraweera proposed to introduce an excise duty of 50 cents per gram of sugar contained in beverages with effect from midnight the same day.
First Capital Equities the new tax will hit food and beverage sector companies like Ceylon Cold Stores, Nestlé Lanka, and Cargills which make and sell soft drinks.
The increase in costs will impact the profitability of the companies affected, the brokerage said in an analysis of the budget.
Samaraweera told parliament the new tax was imposed as part of the ongoing effort to reduce diabetes and obesity, especially among children. (COLOMBO, November 11, 2017)