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Legalising foreign cigarette imports: Health officials cry foul
Health officials argue that the decision to legalise the import of foreign cigarettes will not lead to a reduction in smuggling, and that, it is merely to fool the people into thinking their interests are being protected.
“By allowing foreign cigarettes to be brought in legally, you won’t be stopping the blackmarket trade,” said Dr. Sajeewa Ranaweera, a member of the Expert Committee on Tobacco & Alcohol of the Sri Lanka Medical Association.
“Because the legal cigarettes will be taxed, and people will continue to smuggle and sell cigarettes that are much cheaper.”
Dr. Ranaweera said the only way to stop blackmarket activity is to sell the cigarettes at cost, but added that, this should never be done, as it would flood the market with cigarettes and encourage more people to smoke.
The debate to legalise foreign cigarettes resurfaced after Finance Minister Mangala Samaraweera proposed to allow Chinese cigarettes into the country, for Chinese nationals residing here. It was argued that the Chinese workers smuggle in cigarettes and these find their way into local shops in the blackmarket, and hence, by legalising Chinese cigarettes, the government could break the blackmarket trade and also earn tax revenue.
Dr. Ranaweera maintained that enforcement by Customs and other responsible authorities, was how smuggled cigarettes could be stopped, not by legalising them. Special emphasis was drawn to China Tobacco’s power, being a State-owned monopoly that produces around 2.4 trillion cigarettes a year, and how they would gain control and pressurise the Sri Lanka Government into meeting future demands.
“They are obviously not going to limit their target customer base to the 6,000 odd Chinese workers here, their focus will be on the 1.5 million local smokers, with the aim of increasing this number.” “Once you give the Chinese company a licence, other countries will also demand the same, and this will flood the market with cigarettes. This is against the anti-smoking policy pledged by this Government. If the Finance Ministry wants more revenue they can increase the tax on local cigarettes,” he added.
However, Deputy Excise Commissioner Kapila Kumarasinghe argued that the government would have more accountability, quality control and revenue if they legalised foreign imports. He also advocated the need to break the CTC’s monopoly and their power and influence.
“We can’t halt the smuggling of cigarettes by enforcement, because of many gaps in the system, so we should look at the issue from a different perspective,” Mr. Kumarasinghe said. “By legalising the import of cigarettes, we can monitor and impose regulations on the stocks coming in and we can curtail the blackmarket trade.”
Mr. Kumarasinghe cited the manner in which contraband cigarettes were peddled in casinos and clubs, and the exorbitant prices charged, and expressed the need to stop it.
“A maximum fine of Rs. 1 million or 5 years rigorous imprisonment is the penalty for contraband cigarettes,” he informed. “The police cannot impose a fine. They have to either file a case at the magistrate’s court or refer it to the Excise Department, which will determine the penalty of a compounding fee, based on each case,” he said.
However, detections made by Customs are penalised according to the Customs Ordinance.
“We detected 183 cartons of foreign cigarettes valued at Rs. 2.2 million on June 26, at the Airport, brought by a Sri Lankan coming from Dubai,” said Deputy Director of Customs Lal Weerakoon, who, however, didn’t have statistics available of the total detections made this year.
Detailing the process, he explained that random checks at the airport based on tip-offs, suspicion or previous passenger records, are how officials find smuggled goods.
“Only 5%-10% go through the red channel, where they either declare the goods themselves or we search their luggage, if we have reason to believe they are in possession of illegal pr undeclared items, while 95% of passengers go through the green channel,” Mr. Weerakoon said.
“This is the norm in any airport and we have obligations where we cannot needlessly harass tourists and other passengers.” Most smuggled cigarettes come from Dubai, and passengers from Dubai, Karachi and Chennai are screened carefully by the Customs.