[Intl-tobacco] Kenya: Medics Oppose Plea To Lower Cigarette Taxes

[Robert Weissman]

Medics Oppose Plea To Lower Cigarette Taxes
The Nation (Nairobi)
All-Africa.com, 2002-02-21

The Kenya Medical Association is opposed to proposals by a tobacco
company for the reduction of excise duty charged on locally
manufactured cigarettes.

The association yesterday expressed it's disappointment over
proposals made by the British American Tobacco (Kenya) to the
government that would see the amount of excise duty charged on
cigarettes reduced to the levels imposed by other East African
countries.

"If it is true that the company wants the taxation regime changed,
it is a big blow to the fight against smoking," the association told
the Nation yesterday.

The tobacco company wants a minimum specific tax on cigarettes
adopted as opposed to the current system which brings the tax to 130
per cent. The system involves adding up of all costs of production
before excise duty is charged, making the final product much more
expensive.

The new tax proposals have been included in the budget proposals to
be forwarded to the ministry of Finance.

On Tuesday, while on a tour of the company, Trade and Industry
Minister Nicholas Biwott assured the company that the proposals
would be considered.

Yesterday, the KMA said the trend world-wide was for the imposition
of heavy taxation on tobacco products to discourage smoking.

"The number of young people smoking would rise drastically, putting
them at risk of contracting smoking-related ailments," the
association said.

But Mr David Kiilu, the corporate and regulation affairs head at
BAT, said the company preferred a taxation system that would level
the playing field and encourage fair competition.

"The taxation system in Tanzania and the rest of the region is
specific. We would prefer the system harmonised, especially in light
of the East African Community integration," said Mr Kiilu.

He added: "All we are asking for is a level playing field."

If accepted, the company's proposals would see the price of
cigarettes drastically reduced.

Last year, the company paid Sh5.7 billion to the government in form
of tax.