📈 Govt Revenue From Legal Cigarette Trade Hits 6x CTC Profit

Ceylon Tobacco Company PLC (CTC) is calling for balanced taxation and stronger anti-smuggling enforcement, noting high price differentials are driving consumers toward illicit alternatives and shrinking state revenues. • Fiscal Highlights & Returns: • CTC contributed Rs. 173.8 Bn to Govt revenue in 2025 (~4% of total state revenue), up 8% YoY from Rs. 161 Bn in 2024 and up Rs. 63 Bn since 2021. • Total 2025 tax contribution was nearly 6x CTC’s PAT of ~Rs. 29 Bn. • Corporate Income Tax (45%) accounted for ~Rs. 25 Bn in 2025; total tax incidence on legal cigarettes exceeds 80% of retail price. • Market Breakdown & Illicit Trade Surge: • Total combustible tobacco market: ~9 Bn sticks. • Legal cigarettes: ~1.92 Bn sticks (~20% of total tobacco consumption, down from ~3 Bn in 2022). • Illicit cigarettes: 500 Mn sticks (~5.5%). • Beedis: 6.5 Bn sticks (~73% of market). • Policy Warnings: • High price/tax gaps incentivize smugglers and shift consumers to non-taxed or lower-taxed products. • BAT executives emphasize that moderate, transparent, and predictable fiscal policies—paired with enforcement—are crucial to protect long-term public revenue and local GDP contributions.