BAT Kenya Calls for Differentiated Taxation on Emerging Tobacco Products

According to a report by BusinessDaily on April 29, British American Tobacco Kenya (BAT) is calling on the government to implement a progressive tax on emerging non-combustible tobacco products to avoid excessive tax burdens. However, the government has already stated its intention to raise consumption taxes on all tobacco products, which means both traditional cigarettes and non-combustible products like nicotine pouches and e-cigarettes may face higher taxes.

In an interview with reporters, BAT Kenya's manager, Crispin Achola, called for the consumption tax on new non-combustible smoking products to be lower than traditional cigarettes because studies show that the harm of new non-combustible smoking products is less than that of traditional cigarettes.

Governments around the world, including Kenya, have attempted to curb consumption of cigarettes and other harmful products by implementing heavy taxes. In its mid-year revenue strategy for the 2023 fiscal year, the Kenyan government has proposed to eliminate the current tiered tobacco tax system and implement a uniform consumption tax.

However, some experts have raised questions about this approach, arguing that maintaining different levels of excise taxes is the globally recognized best strategy for tobacco taxation. The Kenyan government has confirmed that it will consider international best practices and unify the excise taxes on all cigarette packs, non-combustible tobacco, and other tobacco products to promote fairness.

The US Food and Drug Administration (FDA) has confirmed that while non-combustible smoking products are less harmful than traditional cigarettes, all tobacco products can lead to nicotine addiction and contain toxic carcinogenic chemicals that can cause serious health problems.

Despite all tobacco manufacturers' efforts to develop newer, less harmful products, the popularity of tobacco products has been declining due to their harmful substances such as carcinogens. At the same time, BAT Kenya's net profit decreased by 19.2% in the 2023 fiscal year, to 5.57 billion Kenyan shillings, which the company attributed to a decrease in sales due to increased taxes.

Although Kenya recognizes that new non-combustible tobacco products are less harmful than traditional cigarettes, the country has not yet implemented specific regulations for these products. However, enforcement of non-combustible tobacco products varies widely among countries, as they only contain addictive elements from nicotine and pose a low-risk level of harm, up to 90% lower than traditional cigarettes.