Kenya is reportedly losing over 9 billion shillings in potential revenue ( taxes and levies ) due to the illegal cigarette trade, according to a recent study. The majority of these contraband products are believed to be smuggled into the nation.
The n Recently disclosed insights from a study carried out by the global research firm Kantar have come to light. indicate t The illegal cigarette trade in Kenya has reached an all-time peak, with over one out of every three cigarettes being sold illegally. in the market not paying taxes.
Last year, t The worth of illicitly transported goods and Counterfeited items confiscated at Kenya's entry points, such as the Mombasa Port, amounted to Sh243. 5 million, as per the Kenya Revenue Authority (KRA). , increasing from Sh200 million, as it aims to strengthen its efforts against illicit imports.
This urgent issue demands comprehensive, multi-faceted measures to close the gaps and safeguard lawful enterprises in Kenya. Industry experts now argue that BAT Kenya has urged authorities to take immediate steps to address and reduce the significant impacts of illegal cigarette trafficking.
"This concerning increase in illicit tobacco trade is not only robbing the Kenyan government of crucial revenues necessary for maintaining the nation’s economic stability, but it is also jeopardizing the safety and livelihoods of countless Kenyans within our supply chain," said BAT Kenya. m anaging d irector said Crispin Achola.
The increase in the sale of illegal cigarettes indicates that the illicit cigarette market in Kenya shifted from 27 per cent Just one year ago, compared to the present unparalleled 37 percent, with the government failing to collect a significant portion of revenue that could be redirected toward various needs. development programs and government services.
"In light of this newly released information and the serious circumstances, BAT Kenya is urging the authorities to take immediate steps to address and lessen the severe impacts of illicit trade not only within Kenya but also across the larger region," stated Achola.
A majority of the contraband cigarettes making their way into Kenya are brought in illegally from adjacent nations, underscoring the transnational character of this unlawful commerce.
The illegal trafficking of cigarettes is more than just an economic concern. , "It concerns national security and public interest," stated Achola.
Each illegal cigarette sold contributes to the growth of organized crime and poses a risk to legitimate local enterprises and employment opportunities. , according to experts.
The Anti-Counterfeiting Authority’s report similarly indicates that overall, Kenya incurs an annual loss of over 153 billion shillings in potential tax revenue due to illicit trade, with counterfeit goods contributing approximately 40 billion shillings to this figure. , primarily focusing on cigarettes, alcoholic beverages, and electronic items.
Fake goods can present significant health hazards for buyers because they do not adhere to the standards set by the genuine producers, bypass quality assurance checks, and frequently malfunction. This may lead to severe malfunctions that could have lethal outcomes.
The illicit trade in counterfeit goods is connected to financing and exacerbating organized criminal activities across various economies, with Kenya being significantly affected by this issue.
Even as BAT Kenya appreciates the steps taken so far by Kenyan officials and their regional partners to tackle illegal trading activities, it said enhanced action is needed to curb the “ dangerous trend .”
Eliminating this problem and safeguarding the interests of Kenyans requires collaboration among all stakeholders. We remain steadfast in our dedication to resolving this matter, said Achola.
The struggle against illegal trafficking cannot be won individually by any of us. It demands a collective effort across various sectors such as government, law enforcement, business community, press, and citizens to guarantee a safer tomorrow for Kenya.
Kenya Revenue Authority has been using the Alcohol and Cigarette Excise Administration System (ECAS) for managing these goods , first implemented in 2013 , to detect fakes.
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