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On the 1st of Jan 2023, the government increased excises taxes on cigarettes by 20% as follows:
| Size | Old Excise Tax per Cigarette | New Excise Tax per Cigarette | Tax Change |
| No larger than 60mm | 6.75 | 13.36 | 6.61 |
| 60mm- 67mm | 28.85 | 34.62 | 5.77 |
| 67mm- 72mm | 41.1 | 49.32 | 8.22 |
| 72mm- 84mm | 46.6 | 55.92 | 9.32 |
| Greater than 84mm | 51.8 | 62.16 | 10.36 |
This was done in order to achieve the increased revenue expectations on excise revenue on cigarettes of LKR 140 Bn. However, our calculations show that the 20% increase in cigarette taxes will not achieve the government's revenue target and will fall short by LKR 48 Bn. In order to achieve the targeted revenue 147% increase in excise taxes will be required.
