When the going gets tough, the tough get going. Quite often is the case, but this is different with the smokers. They have rather taken the easier route. Instead of working harder to maintain their lifestyle, they have chosen to consume the illicit cigarettes on the market following an increase in the taxes imposed on the commodity that has seen its retail price rise substantially.
The government’s move to slap an 11 per cent excise duty on cigarettes has driven the commodity’s prices northwards forcing smokers to resort to illegally imported cigarettes. This has served to fuel the illegal trade as it has been seen to gain rapid growth, in northern Uganda and West Nile where legally registered tobacco companies are facing stiff competition from illicit cigarette brands that are not only cheap but have little impact on the growth of the country’s Treasury.
Industry players say they are not surprised about the growth in illicit cigarette trade as an increase in taxes tends to push consumers to cheap and affordable cigarette brands.
According to industry statistics about 15 per cent of the market consumes illicit tobacco products, translating into more than Shs7 billion in revenue loss.
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