Businesses & Financial News

BAT Uganda calls for urgent action against illicit trade in cigarettes

By Seth Emmanuel

BAT Uganda has called for enhanced action against illicit trade in Uganda, following a 2021 report, which indicates that the illicit trade incidence in cigarettes continues to rise significantly.
 
The research commissioned by BAT Uganda and conducted by Kantar, covered the 2nd half of 2021 and found that 23.8% of the cigarettes sold in Uganda appear to be illicit, accounting for almost one in four cigarettes smoked.
This represented an increase of 54.5% compared to September 2020 when the number stood at 15.4%. Further, the Kantar research found that more than half of the illicit cigarettes (51%) in the market appear to be manufactured in Uganda based on pack markings, with the rest being smuggled into Uganda from other countries. 
 
Similar research conducted in Kenya by Kantar also found that Uganda is a major source of illicit cigarettes in neighbouring countries, with 93% of illicit cigarettes found in Kenya believed to originate from Uganda.
These illicit cigarettes are typically branded ‘Supermatch’, though the report makes no claim as to the actual manufacturer of each pack and bases its findings solely on the observable features of the packet. 
 
Speaking at a media briefing in Kampala today, BAT Uganda Chairman, Hon. Dr. Elly Karuhanga said:
 
“BAT Uganda is concerned that illicit trade in cigarettes is allowed to thrive in this country despite the various negative impacts, which include fuelling organised crime. 
 
“While we acknowledge efforts thus far by the Uganda Revenue Authority in tackling this serious issue, including through the introduction of the Digital Tax Stamps System, much more needs to be done.  
 
“We are calling on the Inspector General of Police, Mr. Martin Okoth Ochola, the Commissioner General of the Uganda Revenue Authority, Mr. John Rujoki Musinguzi, the Minister of Health, Hon. Dr. Jane Ruth Aceng, the Executive Director of the Uganda National Bureau of Standards, Mr. David Livingstone Ebiru, all concerned security and local government agencies, as well as the Uganda Administration, to enhance enforcement against illicit trade in the tobacco industry.
 
“BAT Uganda is committed to collaborating transparently with all relevant agencies to eradicate illicit trade in Uganda. We urge the business community and industry bodies to jointly fight for the eradication of illicit trade in Uganda, and believe that a unified effort is critical in supporting the Government’s efforts to safeguard legitimate business in Uganda.”
 
Alongside calls for greater collaboration, BAT Uganda detailed a multipronged approach to combat illicit trade, including the following measures:
 
  1. Full enforcement of tobacco product and packaging regulations across the tobacco industry.
  2. Proper implementation of the Digital Tax Stamps Solution (DTS). This includes stronger enforcement to prevent under-declaration of local factory production and ensuring that only fully duty-paid products with tax stamps are sold in the Ugandan market.
  3. Greater information sharing and excise tax harmonization within the EAC partner states to help reduce excise-led price disparities between countries, which fuels smuggling.
  4. Tighter border controls and enhanced scrutiny of products to ensure they comply with local laws.
  5. More stringent penalties to act as a deterrent, in the form of custodial sentences and forfeiture of factory equipment, real estate and moveable or immoveable assets arising from illicit trade.
  6. Ratification of the 2012 Illicit Trade Protocol (ITP) under the World Health Organisation’s Framework Convention on Tobacco Control.

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