The Hon. Kabir Hashim
Hon. Kabir Hashim criticized government tax policy as favoring foreign investors through 10-year tax holidays while imposing heavier taxes and enforcement on domestic small industries, citing the beedi sector’s increased tendu leaf import duty, higher per-stick tax, raids, fines, closures, and declining number of licensed producers. He argued that cigarette tax policy had reduced State revenue by not applying the pricing formula, estimating a Rs. 9.48 billion loss and a decline in the tax-in-price ratio from 74 percent to 68 percent. He said foreign investment should be encouraged through consistent trade and investment policy, rule of law, investment protection, foreign exchange safeguards, the National Single Window, and accession to the Madrid Protocol rather than tax holidays.
Verbatim record (translated)
Machine-translated from Sinhala / Tamil / English¶ 01 Mr. Speaker, who supported you during elections and who contributes to the Treasury—foreign investors or our domestic businesses? Yet your policies favor foreigners with 10-year tax holidays, while cracking down on small industries.
¶ 02 Take the beedi industry—village-scale, employing many. The import duty on tendu leaves is Rs. 6,700 per kg; beedi tax was increased from Rs. 2 to Rs. 3 per stick in 2025. The Excise Department, with police, raids, imposes massive fines—Rs. 100 to 150 million—forcing closures. Licensed producers dropped from 1,140 (2024) to 840 (2025). Thousands lose livelihoods, while you offer decade-long holidays to foreign firms hiring 100 workers.
¶ 03 On cigarettes, due to not using the price formula, the State lost Rs. 9.48 billion last year. The tax-in-price ratio dropped from 74 percent under good governance to 68 percent now, increasing company profits while the State’s share fell. This reveals who protects the mafia.
¶ 04 Finally, foreign investment is essential, but not via tax holidays. What we need is consistent investment and trade policy, a strong legal framework, an independent judiciary and rule of law, protection for investments including FX laws, National Single Window implementation, access to the Madrid Protocol, etc. Those reforms bring investors—not tax holidays.
¶ 05 Thank you.
Provenance
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- Hansard, Tuesday, 7 April 2026 ·No. 23476 ·English daily/uncorrected Hansard
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Cite as: The Hon. Kabir Hashim. 10th Parliament, Parliament of Sri Lanka. Hansard, 7 April 2026. No. 23476. Politick, https://staging.politick.io/lk/speeches/539