COLOMBO, September 4 (ePRESS) – A new study by the Institute of Policy Studies of Sri Lanka (IPS) has revealed that cigarette smuggling takes place in different forms across the country and urgent measures are needed to stop it. The study stressed that better understanding of smuggling channels is vital to protect public health, increase government revenue and reduce the damage caused by tobacco use.
Despite high excise taxes aimed at discouraging smoking, illegal trade continues to grow. The IPS report, titled “Tobacco Smuggling in Sri Lanka – A Scoping Study”, shows that smuggling allows cheap cigarettes to reach the market, making them more accessible, especially to youth and low-income groups.
“Smuggled cigarettes bypass health warnings and taxes, making them cheaper and more dangerous,” said Dr. Erandathie Pathiraja, lead author of the study and Research Fellow at IPS. “This not only adds to healthcare costs but also deprives the government of crucial revenue.”
The study, co-authored by IPS researchers Nishamini Ihalagedara and Ruwan Samaraweera, also highlights that official customs data on seized cigarettes does not prove that higher taxes directly increase smuggling. The volumes seized do not always change with tax rates. Instead, corruption, weak border controls, and poor enforcement play a bigger role in fuelling the illegal trade.
Drawing lessons from global practices, IPS called for stronger enforcement, modern tracking systems with digital excise tax stamps, better border control, and public reporting incentives. Researchers stressed that new technology, transparency, and community engagement are key to reducing smuggling and protecting both public health and government income.
The full publication is available on the IPS website: www.ips.lk/tobacco-smuggling-in-sri-lanka-a-scoping-study-2025/
.
