COLOMBO, Sri Lanka — Sri Lanka’s National Authority on Tobacco and Alcohol (NATA) has formally presented the country’s Health Minister with a concept paper proposing that all citizens born after 2010 be permanently prohibited from purchasing tobacco products — a sweeping generational policy that would align Sri Lanka with a growing global movement gaining legislative momentum from London to the Maldives.
The proposal was presented to Health Minister Dr. Nalinda Jayatissa by NATA Chairman Dr. Ananda Ratnayake and LL Amila Isuru of the Faculty of Medicine at Rajarata University, who led the preparation of the document. Backed by scientific research, it also includes recommendations to amend and strengthen the existing NATA Act.
The announcement came on April 30, 2026, one day after the United Kingdom’s Tobacco and Vapes Act received Royal Assent, making Britain the first country in Europe to pass legislation phasing out tobacco sales for future generations. Under the British law, it will become illegal to sell tobacco products to anyone born on or after January 1, 2009, with the age-based restrictions set to take effect on January 1, 2027.
A Gathering Global Consensus
Sri Lanka's proposal places it within a rapidly expanding cohort of nations rethinking the long-term future of tobacco sales. New Zealand pioneered generational tobacco ban legislation when it passed a similar law in 2022, though after a more conservative government came into power in 2023, that law was repealed.
The Maldives was the first country globally to introduce a smoke-free generation policy, which came into force in late 2025. Canada has also entertained the idea, and in the United States, similar generational tobacco ban bills have been filed in Hawaii and Massachusetts.
European governments have also tightened controls on tobacco and nicotine products in recent years as part of a broader push to reduce smoking rates among youth, with Belgium and Latvia banning the sale of disposable vapes in January 2025 and Spain and France introducing new restrictions on outdoor smoking in public spaces.
The convergence of these efforts reflects a shared recognition among public health authorities that the most effective way to end tobacco use is not to persuade current smokers to quit but to prevent the next generation from starting at all. Research cited by advocates in the UK found that over four in five smokers became addicted before the age of 20, most as children, and that two in three people who try a single cigarette go on to become daily smokers.
The Scale of the Problem in Sri Lanka
For Sri Lanka, the urgency of the proposal is grounded in data that health officials describe as alarming. Dr. Ratnayake noted that nearly 80 percent of deaths in the country stem from non-communicable diseases, with tobacco and alcohol identified as leading causes. The country records an estimated 22,000 deaths each year attributable to both substances. LL Amila Isuru warned of a particularly troubling trend: rising cigarette use among schoolchildren, and the disproportionate burden that tobacco-related illness places on public health expenditure.
According to the Alcohol and Drugs Information Centre, alcohol and tobacco consumption in Sri Lanka results in an estimated annual economic loss of 241 billion rupees — equivalent to roughly 40 percent of the public health budget and approximately 1.5 percent of gross domestic product.
Globally, smoking is responsible for more than 7 million deaths each year, according to the World Health Organization, a figure the NATA concept paper also cites, noting that approximately 10 percent of tobacco-related deaths result from passive exposure.
The Tax Revenue Dilemma
The proposal's most significant hurdle may not be political will but fiscal arithmetic — a tension that has bedeviled tobacco control efforts in Sri Lanka for years, and one that puts the Health Ministry on a collision course with the Finance Ministry.
Ceylon Tobacco Company, a subsidiary of British American Tobacco that holds a near-monopoly on cigarette manufacturing and sales in Sri Lanka, contributed 173.8 billion rupees to the Treasury in 2025 — around 4 percent of total tax revenue — making it one of the state's most reliable fiscal pillars at a time when Sri Lanka is under intense pressure from the International Monetary Fund to sustain revenue gains as part of its ongoing economic recovery programme. Reflecting the sector's importance to the exchequer, the government increased the income tax rate on tobacco manufacturers from 40 percent to 45 percent effective April 2025.
The dependency is not new. Research has long noted that even though there is a heavy social cost of tobacco use, being a lower-middle-income country, the government depends on tax revenue from tobacco to manage annual government expenditure — a calculation that successive administrations have been reluctant to disturb. A generational ban, by its nature, would gradually extinguish that revenue stream over decades.
The situation is further complicated by an emerging structural risk. Ceylon Tobacco Company has warned that repeated excise hikes are accelerating a shift toward illicit cigarettes, potentially undermining government revenue even as the sector remains a major fiscal pillar. "The persistent threat posed by the illicit market, driven by the widening price gap between legal cigarettes and their illicit counterparts, remained a challenge during the year," the company's chairman said. A generational sales ban could intensify that dynamic, pushing demand underground rather than eliminating it.
What a Single Cigarette Actually Costs — and Who Gets the Money
The arithmetic of a single cigarette in Sri Lanka tells a story that neither the government nor Ceylon Tobacco Company has any particular interest in advertising.
A Gold Leaf cigarette — the country's most popular brand — retails for approximately Rs. 160 per stick following the January 2025 price increase. Ceylon Tobacco Company raised prices by Rs. 10 per stick on the 83mm Gold Leaf after the government announced a fresh excise duty hike effective January 11, 2025.
The typical manufacturing cost of a cigarette globally is roughly two to twelve US cents — often toward the lower end — covering tobacco leaf, paper, filter, and labour. In Sri Lanka's case, with lower labour costs and a captive domestic supply chain, that translates to somewhere in the range of Rs. 3 to Rs. 8 per stick in actual production cost — a conservative estimate based on global industry benchmarks. The rest of what the smoker pays is divided between the government, the company's profit margin, and the retailer.
A detailed breakdown of Philip Morris's global financials — the world's largest cigarette manufacturer — found that of every unit's retail price, excise taxes alone accounted for 6.2 cents out of a total 9.8 cents, meaning the government's cut dwarfs the actual cost of production, which came to just 1.3 cents per cigarette. Applied to Sri Lanka's context, the proportions are similarly stark: of the Rs. 160 a smoker pays for a Gold Leaf, the state collects the dominant share through layered excise duties and VAT, with Ceylon Tobacco Company contributing Rs. 173.8 billion to the Treasury in 2025 — around 4 percent of total tax revenue.
What this means, in plain terms, is that both the government and CTC profit enormously from an addicted population. The smoker, who is statistically most likely to be male, lower-income, and to have started before the age of 20, pays a price that is inflated by roughly twenty to forty times its actual cost of production, with the surplus divided between a state hungry for revenue and a multinational company booking healthy profits. CTC recorded a 10 percent rise in profit before tax in 2025 even as health advocates warned of rising smoking rates among schoolchildren and the country registered an estimated 22,000 tobacco- and alcohol-related deaths per year.
Industry reports indicate that cigarette manufacturing plants globally operate with gross profit margins of 55 to 60 percent before taxes are even factored in — meaning the product is not just taxed heavily, it is also sold at a substantial markup by the manufacturer before the state takes its cut. The smoker, in effect, subsidises both.
It is this arrangement — mutually profitable for the government and CTC, and lethal for the consumer — that NATA's generational ban proposal would begin, slowly and over decades, to dismantle. Whether a government that collected Rs. 173.8 billion from tobacco last year is prepared to do so remains the central and unanswered question.
The Alcohol and Drugs Information Centre has raised concerns that no new taxes were introduced in 2026 to discourage youth from starting to use tobacco products or to encourage smokers to quit, describing the government's tax policy as lax. The Global Tobacco Industry Interference Index, updated in 2025, placed Sri Lanka 45th out of 100 countries assessed — with a declining score since 2023 — finding that Ceylon Tobacco Company wields increasing influence that weakens public health protection mechanisms.
Will the Government Act?
Minister Jayatissa welcomed the concept paper and instructed NATA to prepare detailed provisions for legislative amendment — the next formal step before any bill could be drafted and introduced to Parliament. But the minister did not set a timeline, and no commitment to legislation has been made.
Sri Lanka already prohibits the sale of tobacco to individuals under 21 and has implemented several other global best-practice measures under the NATA Act and the WHO Framework Convention on Tobacco Control, which the country ratified in 2003. The generational ban, however, would represent a categorically different and more permanent intervention — one that, once enacted, would be politically difficult to reverse.
The precedent from New Zealand, where such a law was passed and then repealed after a change of government, serves as a cautionary note. After New Zealand's more conservative government came into power in 2023, it scrapped the generational ban — demonstrating that even enacted legislation is not immune to political reversal when fiscal and ideological pressures combine.
Sri Lanka's current government, led by President Anura Kumara Dissanayake's National People's Power coalition, has positioned itself as reform-minded on public health. But it is also navigating one of the most constrained fiscal environments in the country's post-independence history, with IMF programme conditions limiting its room for manoeuvre. Whether it is willing to absorb a long-term erosion of tobacco tax revenues in exchange for generational public health gains remains an open question.
