1 DECEMBER “2022” NTV news
According to the British American Tobacco from their commissioned research, nearly 30% of the cigarettes sold in Uganda are illicit or smuggled
URA INTENSIFIES CRACKDOWN AGAINST ILLICIT CIGARETTE TRADE
Besides collecting revenue, one of the roles of Customs is protection of society against harmful imports and facilitation of trade through creation of a level trading ground for all legitimate traders.
This is the reason why the Customs enforcement team set out in the last two years to comb the areas of Kampala, Elegu, Arua, Madi Opei, Pakwach, Corner Kamdini and seized more than 293,099 cartons of illicit cigarettes valued at UGX 1,219,920,000.
The major brands intercepted were Super Match, Oris, Dunhill, Business Royal and Sportsman cigarettes. These impounded cigarettes were deposited at the Customs warehouse in Kampala for due processing which culminated in their destruction in Nakasongola.
Abel Kagumire, the URA Commissioner Customs noted during the engagement that more smuggled goods will be destroyed in order to rid the market of other prohibited or restricted products such as dangerous cosmetics, polythene bags, used computers and fridges among others
British American Tobacco Uganda Limited (BAT Uganda), a company that grows and processes tobacco in Uganda and sells cigarettes and other tobacco products to the local market and for export has donated Hammermill – a cigarette destruction machine to the Uganda Revenue Authority (URA) in efforts to support the national fight against illicit trade in cigarettes.
The acquisition of a mobile cigarette destruction machine will be used to destroy illegal cigarettes seized by the Customs Enforcement team of URA.
Receiving the machine at URA head offices in Nakawa, Dr. Okaka Godfrey – Acting Commissioner Customs said that the Hammermill will provide a more convenient and cost-efficient way to destroy illicit cigarettes compared with to manual methods.
“The process of destroying seized cigarettes has always been handy. On March 18, 2022, we had cigarette destruction in Nakasongola and we incurred a lot of costs of approximately shs100m. Now with this facility, we can easily take on the exercise,” he said.
The acquisition of the machine follows a 3rd party research report by Kantar, commissioned by BAT Uganda, which revealed that 27.5% of the cigarettes sold in Uganda are illicit. Additionally, 56% of these illicit cigarettes are manufactured in Uganda for export, with the rest being manufactured in other countries before being smuggled into the country.
In 2021, BAT recorded a 41% drop in its tax remittances to URA, from UGX 82.76 billion in 2020 to UGX 48.64 billion, largely driven by the impact of illicit trade in cigarettes to business revenues. It is estimated that the government loses approximately UGX 30 billion annually to the Illicit trade in tax evaded cigarettes.
Dr. Okaka noted that smuggling is detrimental to fair trade because it reduces government revenue and puts a strain on compliancy businesses that are unable to sell their products because the market is stranded with smuggled goods.
He revealed that between 2019 to 2022, the URA enforcement teams in Kampala, Elegu, Arua, Madi Opei, Pakwach, Corner Kamdini and other remote stations relying on the intelligence-led focused operations model seized more than 293,099 cartons of illicit cigarettes valued at USD 340,000 or UGX 1,219,920,000.
“The major brand intercepted was Super match made in Uganda for export contributing to more than 90% of the seized cigarettes. Others include high end brands like Oris, Dunhill, Business Royal, Sportsman.”
He commended BAT Uganda for its continued contribution and commitment in combating cigarette smuggling in Uganda, something he says is a demonstration of developing Uganda