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| Posted: 15 Aug 2009 09:19 Last Edited By: chilee | ||
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Administrator Currently Offline |
Posts: 563 Join Date: Dec 2008 |
Is 12 % of the annual GDP covered by liquor and tobacco revenue? CTC stands for Ceylon Tobacco Company; the name only stands for Sri Lanka, nevertheless 84% of the CTC's shares are owned by the British American Tobacco and 10.11% shares are owned by Non Resident share holders only 5.67% are owned by the local share holders, therefore the money which owned by British American Tobacco has not considered here. The following describe the composition of shares of CTC and its profitability deviation. Composition of Shares Percentages Resident - Local 5.67% Non Resident - BAT 84.13% Non Resident-Other 10.11% Directors 0.09% Total 100.00% (CTC annual report 2008) CTC Profitability Deviation In Millions CTC-Profits 2007 2008 Profit For the Year 1,894 2,761 Share of BAT (84.13 %) 1,593 2,323 Local Shares (5.67 %) 107 157 (CTC annual report 2008) Considering the Central Bank Annual Report -2008 (Statistical Appendix Table 2 and 22) it is transparent that in 2008 the GDP in Sri Lanka was around Rs. 2,365,500million while the expenses on tobacco and beverages which were to be said on the top of the expenses would be around Rs. 24,151million which is ultimately around 1% of the Gross Domestic Production of Sri Lanka. This emphasizes the fact that liquor and tobacco revenue is not significant considering the Sri Lankan Domestic Production. It is a well known fact that 12% of the GDP is covered by Alcohol and Tobacco .The fact that needs to emphasize is that it is not prudent to consider the total excise tax on tobacco and liquor as a percentage of GDP since both of them are different kinds of classifications which cannot be taken together. Therefore when expressing the GDP percentages, it is clear to indicate the total expenses for the alcohol and tobacco as a percentage of GDP of Sri Lanka. Further the Central Bank Report 2008 indicates that total Tobacco and Beverage Expenses on GDP of Sri Lanka has been fluctuated within the range of 1.02% and 1.28% during the recent past. It is straightforward that Excise tax on total Government revenue prevails within the range of 9.18% to 11.87%. Although the figures have a dynamic behavior, in 2008 Excise tax on total government revenue was around 9%. In such a situation it is very strange to hear that 12 % of the GDP is covered by alcohol and tobacco revenue. Further Sri Lanka is a developing country in the Asian region. Out of the 19 million of the total population still 20 % is living below the poverty line. One of the major revisable factors contributing to poverty in Sri Lanka is revealed as the economic, social, and health harm caused due to the use of alcohol consumed by poor communities. If we calculate their monthly expenditure in plantation sector, the statistics indicate that their expenditure for alcohol consumption is between 40%- 50 % range (Base line survey on estate sector program), and in most remote areas one third of their monthly income is spent on alcohol and tobacco use. |
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