Sri Lanka has lost more than Rs. 25 billion in tax revenue since 2025 due to cigarette taxes being maintained below the level recommended by the World Health Organization (WHO), according to Verité Research.
The institute said revenue losses exceeded Rs. 8 billion during the first six months of 2026 alone.
The findings were released alongside the launch of the Cigarette Tax Leakage Tracker, a live online platform developed by Verité Research to monitor financial losses resulting from cigarette taxation policies.
The tracker provides real-time estimates of lost tax revenue and is publicly available through the PublicFinance.LK website.
According to the WHO, at least 75% of the retail price of cigarettes should consist of taxes to effectively reduce tobacco consumption while maximizing government revenue.
Sri Lanka last came close to meeting this recommendation in 2018, when taxes accounted for 74% of the retail price of cigarettes.
However, the tax share has gradually declined in recent years and has remained at 67% since 2025, a reduction that Verité Research says has contributed significantly to the country’s revenue losses.
The organisation said the Cigarette Tax Leakage Tracker aims to provide policymakers and the public with transparent, real-time information on the financial impact of cigarette tax policies.
