Uganda loses its shs38 billion to trading illicit cigarettes in 2021

Africa: As per the research of British American Tobacco (BAT) officials, Uganda lost their shs38 billion to trading illicit cigarettes in 2021.

Bat organized a workshop on illicit trade at Hotel Africana in Kampala organized by Uganda Breweries Limited; Billy Tsuma (right), the BAT Fiscal Affairs Engagement Manager for East Africa, stated that much of the cigarettes consumed in the same period Uganda were as a result of illegal trade.

According to Tsuma, “Cigarettes are one of the most trafficked goods, reducing governments’ earnings. In the last quarter of 2021, 24% of the cigarettes smoked in Uganda resulted from illicit trade and shs38 billion which was supposed to go URA was lost.”

Furthermore, he stated that now it is difficult to stop Ugandans to consume cigarettes because these are the fast consumer goods that they bring from retailers, especially in the morning and evening time, they prefer to consume.

By accounting for 24% of the cigarettes on the market, the Ugandan government failed in excise earnings, which led to lessening income collected from legitimate cigarette sales.

As per the official’s statement, most illegal cigarette manufacturing is done locally, whereas 49 percent were smuggled from neighbouring countries.

As per the sources, the biggest driver of the illegal tobacco trade is tax-evaded cigarettes, which carry with fake tax stamps, cigarettes are exported that are not sold in their p[roper destination market and cigarettes smuggled into Uganda.

As per the statement of ‘Joanita Menya‘, the Managing director for Unilever Uganda, during the campaign, all the illegal goods and products should carry a toll on individuals, companies and governments.

“It costs reputation for businesses and companies. Companies like Uganda Breweries and Unilever are known for quality, but we lose out on reputation every time there are counterfeits because it loses our trust. After all, those products come cheaper than genuine, said Menya.”

Furthermore, they stated that “We have lost the Geisha and Sunlight factories here, but the parent company in the UK decided to pull out of Uganda due to counterfeits. Because the businesses were not making optimal investments, they chose to pull out of Uganda. This essentially means we are losing out as a country in terms of investment opportunities but also on jobs.”

As per the trade minister, those illegal goods is growing day by day due to a number of factors.

According to ‘Joseph Lubuulwa’, the Brand Protection Manager for Uganda Breweries Limited, “many people prefer to go for alternate goods which are cheaper and in most cases, these are goods which are not genuine. The fact that illegal trade is profitable because of not paying taxes and being unregulated but people are earning has seen this vice grow.”