July 1 is said to be the date when the Tobacco Control (Amendment) Act will come into force seeking to impose an export levy of $0.8 per kilogramme on leaf tobacco exported out of the country as passed on May 3.
This comes at a time when the tobacco industry’s economic impacts versus its health after effects continue to linger as a continuous paradox leaving many countries including Uganda torn between the exploitation of tobacco as an economic resource and at the same time posing a great health risk to its population given the levels of nicotine that come prepackaged with in it.
According to Jane Avur Pacuto, the vice chairperson of Parliament’s Committee on Finance, Planning and Economic Development, the new tax is expected to generate revenue of Shs20 billion. She further said it will enhance value addition since a kilogramme of processed tobacco leaf costs almost five times that of unprocessed tobacco.
It is worth noting that it was estimated that more than 75,000 farmers in Uganda relied on tobacco by 2020 and regardless of the fact that 95 per cent of the leaf produced is being exported to Kenya, Uganda reportedly has more than 16 tobacco companies and more than four reknown processing companies.
Speaking econometrically, we cannot under look the fact that British American Tobacco (BAT), the leading cigarette company which in 2019 accounted for 51.7 per cent of the overall volume sales in the country’s cigarette market, amid the struggles of the Covid-19 after effects of the pandemic, recorded contributions to government in tax revenue to be Shs91 billion while its Gross Revenue was Shs162 billion for the year ended December 31, 2020.
While standing at cross roads, torn between whether to support tobacco that it may yield more profits given its staggering economy or craft mechanisms that trigger a sequence of events which will downplay use of the leaf and hence curbing its after effects, the country is now faced with a serious decision to make.
The Uganda Tobacco Control Bill of 2015 is considered the strongest in Africa right from its time of passage having entailed tight clauses on prohibiting tobacco industry interference, prices being 40 per cent of the retail price, 100 per cent smoke-free public places, a ban on the sale of cigarettes to and by persons under 21 years, a ban on tobacco advertising, promotion and sponsorships, requirements of cigarette packs not prominently showing at point of sales among the rest but these have hindered the Tobacco Industry from performing to its peak.
In the Financial Year 2019/2020, according to Uganda Revenue Authority (URA) annual revenue performance report, cigarettes contributed 0.43 below the target of 6.23 of VAT as was set. A target which was above that of Oil and Gas and Mining and Quarrying which were 1.40 and 5.45 respectively.
Regardless, just as the Africa Tobacco Industry Monitoring Report of September 2020 by E Wanyonyi, M Talibita, M Kirigwajo and T Rusoke clearly put it, unless there is a sustainable intervention, smoking prevalence is predicted to increase significantly in Sub-Saharan Africa and that this situation is likely to increase the growing burden of non-communicable diseases in the region.
As would be expected in an epidemiological model, the vector remains an important target for disease control.
Let us face it, as much the vector for tobacco-induced diseases is the tobacco industry itself, if not provided with slightly more condusive policies for them to better operationalise, Uganda, as the Kalungu West MP, Joseph Ssewungu argued while commenting on the Bill Amendment, is likely to be shunned by potential investors, especially now that major players in the Tobacco Industry such as BAT have taken their business from Uganda to Kenya.
Mr Solomon A Mutagaya is a chemical engineer, quality assurance engineer at KCL group