- Category: News and Highlights
KIPPRA in partnership with the International Institute for Legislative Affairs (ILA) organized a breakfast meeting on Situational Analysis of Illicit Trade in Tobacco Products in Kenya on 5 December 2013. The aim was to share preliminary study findings of review of institutional framework on illicit tobacco trade in Kenya; the nature and extent of illicit tobacco products in Kenya; regional collaborative efforts on illicit trade; and selected international experiences on illicit trade in tobacco products.
Despite existence of various legislative initiatives taken by the government, illicit trade in tobacco products (including counterfeiting and tax evasion) has continued to be of concern. Illicit trade in tobacco products poses multiplicity of social costs including loss of tax revenues, loss of market share and brand image for genuine manufacturers, and additional harm to consumers since illicit trade often operates outside legislative framework. The issue of consumer protection is enshrined in the Constitution of Kenya 2010 (See Article 46), including the protection of their health, safety and economic interests. The Tobacco Control Act 2007 provides for price and tax measures to control tobacco consumption. To achieve the policy objective of reduced tobacco consumption, efforts to reduce illicit supply (which often evade taxes) should be prioritized.
The workshop was attended by stakeholders from both private and public sector. The participants commended KIPPRA for taking a gallant step to address this controversial topic due to the divergent interests of different stakeholders. Key issues raised include:
(i) The need for in-depth study of different aspects of illicit trade (both tax evasion and counterfeiting). It was noted that while counterfeiting is often given more attention, tax evasion is also a key concern.
(ii) There is a challenge of up to date accurate data on illicit trade. The National Strategy for Development of Statistics, spearheaded by KNBS, should be adequately informed to address this challenge.
(iii) Illicit trade initiatives should include regional collaborative efforts. Given that East African Countries are at different stages of enacting legislations on illicit trade, there is need for harmonization of the laws.
(iv) There are various government agencies mandated to curb illicit trade in Kenya. There is need for insights on whether they are achieving intended objectives; and how their operations can be coordinated.