Leaf growing abandoned over tax impost

British American Tobacco Uganda’s decision to stop supporting leaf growing in the country was taken partly because of the imposition of a leaf tobacco export tax of US20 cents per kg, according to a story by Paul Tentena for the East African Business Week.

The tax was introduced as part of the June budget.

“The profitability from our leaf export will be significantly eroded by the recent imposition of a leaf export tax at 20 US cent,” BATU’s managing director, Jonathan D’Souza, was quoted as saying.

“We’re engaging with relevant stakeholders to highlight the impact of this tax on our leaf growing operation at a time when we cannot pass on this tax to our customers in view of the timing of the leaf growing season and the global over-supply of tobacco.

“This situation is further compounded by the proposed repeal of existing tobacco growing regulations in the draft 2014 Tobacco Control Bill that is currently being reviewed by Parliament,” D’Souza added.

More than 14,000 growers are expected to be affected by BAT Uganda’s decision.