A tobacco control lobby has piled pressure on Parliament to endorse the Treasury proposals to increase tax on cigarettes, arguing any changes will reverse the gains in the fight against nicotine use.
The tax is meant to increase retail prices and potentially discourage the production and distribution of the products.
The NTA asked the MPs to ensure that there is a uniform tax for all types of cigarettes.
A tobacco control lobby has piled pressure on Parliament to endorse the Treasury proposals to increase tax on cigarettes, arguing any changes will reverse the gains in the fight against nicotine use.
The National Taxpayers Association (NTA) has expressed fears that the Finance and Planning Committee will interfere with the Treasury’s proposal that increases excise duty on nicotine products.
The committee, in 2019, cut the Treasury proposal to raise excise duty on nicotine substitutes from Sh5,000 to Sh1,500 per kilogramme.
The Treasury did not effect any tax increase on tobacco products in 2020/21.
Treasury Cabinet secretary Ukur Yatani last month proposed changes to the taxation regime for liquid nicotine from the current zero shillings per unit to an excise duty of Sh70 per millilitre.
The Treasury, through the Finance Bill 2022, has proposed to increase the tax on filtered cigarettes from Sh3,447.61 per mille or 1,000 cigarette sticks to Sh3,825. 99 per mille.
The Bill also increases the excise tax on plain cigarettes which will be raised from Sh2,502.72 per mille to Sh2,752.97 per mille.
“Our fear as tobacco control advocates is that the Finance committee chaired by Gladys Wanga will again interfere with the increase in tax on tobacco products as proposed by the Treasury,” said Franciscah Marabu, programmes officer responsible for tobacco products at the NTA.
“We know the power tobacco firms have in lobbying for reduced taxes on nicotine products.”
It is our hope that the committee will not reverse the tax proposals on tobacco as proposed by the Treasury.”
The tax is meant to increase retail prices and potentially discourage the production and distribution of the products.
The NTA asked the MPs to ensure that there is a uniform tax for all types of cigarettes.
Marabu said NTA has sent a proposal to Parliament to ensure that both filtered and non-filtered cigarettes are taxed at the same rate.
“We have proposed that filtered and plain cigarettes be placed under one tax category and taxed under one uniform specific tax. This will stop smokers from switching to less costly cigarettes,” Ms Marabu said.
The current tobacco excise tax regime was instituted in 2015, but then-Treasury Secretary Henry Rotich gave low-end cigarette smokers a price relief with a significant cut in excise tax that saw the price of non-filter sticks fall by 70 cents.
Mr Rotich split the tax structure for cigarettes keeping it at Sh2.5 per stick for cigarettes with filters and introducing a new rate of Sh1.8 for those without.
The two types of cigarettes had been attracting a uniform tax of Sh2.5 per stick.
