700 million fake cigarettes sold locally as State pledges to tackle vice

Treasury CS split tax structure for cigarettes. FILE PHOTO | NMG 

About 700 million fake cigarettes were sold locally last year, with Kenya losing billions in taxes, a cigarette firm on Monday told a forum on illicit trade in Nairobi.

BAT’s Area Head of Security John Evans said corruption in government was to blame for the losses, even as the State announced a multi-sectoral agency to deal with the vice.

He said convictions and fines are meted out by courts daily but unaccustomed cigarettes bearing Kenya Revenue Authority (KRA) stamps still find their way into the market.

“The new multi-agency model must be well-equipped and funded to win this war against graft starting from within,” Mr Evans said.

Corrupt officers

The consultative forum heard that unscrupulous government officials facilitated entry of the goods via Kenya’s border points while others helped the goods to acquire approval certificates including revenue stamps.

“We need to invest in this fight where even "untouchable" government officials who protect the illicit tobacco traders are dealt with severely,” he said.

Mastermind Tobacco (Kenya) Limited’s Jason Njenga said they were spent Sh70 million annually fighting counterfeit products where nearly 200 cases were reported weekly.

Welcome move

The manufacturers and franchise-holders welcomed the planned team to combat the trade, noting that graft was the biggest hindrance in tackling the issue.

Trade Principal Secretary Chris Kiptoo said a notice will be published in the Kenya Gazette in a month’s time regularising formation of the National Anti-illicit Trade Committee as well as an Executives’ forum where state agency chief executives will meet regularly to spearhead the fight against counterfeit products.

“We must help our manufacturers reach their 15 per cent target up from the current 9 per cent. And regulatory agencies must co-ordinate their activities to beat illicit trade that has eaten a large chunk of the market share for genuine manufacturers,” he said.

The forum urged the formation of special courts to fast-track hearing and determination of anti-counterfeit suits, saying culprits bribed their way to freedom by delaying hearing of suits making litigation expensive.

Survey

Dr Kiptoo added that a survey on the counterfeit trade would be conducted in a month to establish its impact on Kenya’s competitiveness as an investment destination.

The multi-agency committee will bring together the KRA, Anti-Counterfeit Agency, Kenya Industrial Property Institute, Pests Control and Products Board, Kenya Plant Health Inspectorate Service among others.

Most counterfeited products include processed foodstuff and alcoholic beverages, household products and appliances as well as pesticides and acaricides, human and animal drugs.