BAT Uganda speaks out after flooring govt in tax dispute

Friday April 12 2019

From left: BAT Kenya chairman George Maina,

From left: BAT Kenya chairman George Maina, managing director Beverley Spencer-Obatoyinbo and legal and external affairs head Simukai Munjanganja during the firm’s AGM in Nairobi on Friday. PHOTO | SALATON NJAU | NMG  

By The Citizen Reporter @TheCitizenTZ

Dar es Salaam. British American Tobacco (BAT) Uganda said yesterday that it supports the formulation of balanced and equitable laws, insisting that it would always work with stakeholders towards realization of the full benefits of East African Community (EAC) regional integration.

The statement, produced yesterday, comes just days after the company won a tax dispute against the Ugandan government at the East African Court of Justice (EACJ).

“Not only does the judgment safeguard the letter and spirit of the EAC Treaty and Protocols, but we believe that it will provide an opportunity for fair competition by levelling the playing field for products from EAC partner states. This will in turn stimulate much needed economic growth in the EAC region,” the BAT East and Central Africa Head of Legal and External Affairs, Simukai Munjanganja, said in the statement. Late last month, the EACJ found the Ugandan government acted illegally by imposing Excise Duty on goods imported by BAT within the region.

This was a violation of the East African Community Treaty, Customs Union and the Common Market Protocols.

The ruling followed a case filed by British American Tobacco (BAT) Uganda, challenging the government over the Excise Duty (Amendment) Act of 2017, that was assented to by President Yoweri Museveni June 13. The tax was later implemented on July 1, 2017 with Uganda Revenue Authority subsequently issuing assessment notices to BAT.

The tax assessment initially categorised the cigarettes as locally manufactured but subsequently re-categorised the same as imported, attracting Excise Duty of Ush75,000 per 1,000 sticks of ‘soft cup’ and Ush100,000 per 1,000 sticks of ‘hinge lid’.

The judgment delivered by a panel of five judges in Arusha, Tanzania further ruled that the Excise Duty (Amendment) infringes on sections of the East Africa Customs Union Protocol and the Common Market Protocol.