BAT Kenya in last-gasp attempt to have Lyft ban lifted
British America Tobacco Kenya (BAT) has told a parliamentary committee that the 100 per cent excise tax increase proposal on a nicotine product that is still not in the market will deny the government a new revenue stream, citing unsustainability in the eventuality it gets a regulatory green light.
The argument is set to give the company more bargaining power in the ongoing talks with the government to address a regulatory dispute that halted the sale of its popular Lyft brand. “If not reviewed, the proposal will result in our inability to launch these products, foreclosing what should have been a new revenue stream for the government. Our factory will no longer be commercially viable, and we shall be left with no choice but to relocate,” BAT Kenya Managing director Crispin Achola told the finance committee led by Gladys Wanga (pictured).
BAT is placing its argument on the Finance Bill 2021 where the National Assembly reviewed downwards an initial excise charge from Sh5,000 per kilogramme of nicotine oral pouches to Sh1,200 per kilogram because it was a new investment. But in change of tunes, the Finance Bill 2022 proposed a higher of Sh2,500 per kilogramme as the Treasury seeks to raise additional Sh50.4 billion to service the budget.
Lyft brand, a nicotine pouch marketed by BAT Kenya, was introduced into the local market a year back before temporary ban in February 2021 over a wrong regulatory framework that made it easily accessible to children.
The proposal to slap Lyft with even a much higher tax than when it was in the market signals a changed stance and government’s dependence on excise tax revenue that has been its cash cow for years.
Revenues on sales of excisable or ‘sin’ goods amounted to Sh65.25 billion against a target of Sh58.25 billion in the October-December 2021 period.
If the Finance Committee backs down, it is also likely to breathe life to BAT Sh2.5 billion nicotine plant in Nairobi that is currently under construction. – Herald Aloo