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Anti-tobacco lobbies warn against agreeing to BAT tax break request

BUSINESS
By Jeckonia Otieno | October 4th 2020

A man displays a cigarette. [Elvis Ogina, Standard]

Four tobacco control lobby groups have raised an alarm over a request by cigarette manufacturer BAT Kenya seeking a tax holiday for nicotine pouches.

This is after BAT announced that it was in talks with National Treasury and the Kenya Revenue Authority (KRA) to have pouches exempted from excise duty for two to three years.

The Kenya Tobacco Control Alliance (KETCA) now warns the move will deny government the much needed revenue as well as endanger the lives of Kenyans.

The backlash follows BAT’s announcement that the completion of its Sh2.7 billion pouches manufacturing plant is nigh. The cigarette manufacturer said it has paid Sh80 billion in taxes for the past five years.

“In a report published in one of the local dailies dated September 18, 2020, BAT claims the nicotine pouches are less harmful than cigarettes and therefore should be given a tax grace period and be subjected to a much less tax thereafter,” KETCA noted in a statement read by its chair Joel Gitali.

KETCA urged Treasury to impose heavy taxes on all products being introduced into the market by tobacco firms, including oral nicotine products and e-cigarettes.

It also wants uniform taxation across all combustible tobacco products. “As it concerns tobacco use and its derivatives, taxation and pricing policies have been identified as the most effective strategies to reduce consumption and even encourage quitting of their use.”

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BAT was also accused of advancing its own agenda during the Covid-19 pandemic. KETCA cites an instance where BAT gave a donation of Sh10.6 million to the Covid-19 Fund, which tobacco control advocates term contrary to the law.

KETCA said tobacco products were later listed as essential commodities. It urged the State to deregister LYFT and take action against the Pharmacy and Poisons Board for licensing nicotine pouches. 

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