Category: News This Week

  • Cambodia to Implement Tobacco VAT

    Cambodia to Implement Tobacco VAT

    Photo: mehaniq41

    Companies importing and distributing cigarettes in Cambodia will have to apply value-added tax to these products effective Aug. 1, reports  The Phnom Penh Post.

    The procedure mirrors the application of VAT on other taxed commodities, with a flat rate of 10 percent on all cigarette supplies in Cambodia.

    VAT paid at the point of importation or domestic purchase may be claimed as an income tax credit, deductible with output tax, according to the Ministry of Economy and Finance.

    Furthermore, enterprises importing cigarettes for export purposes will be permitted to pay a one-off value-added fee at the point of importation.

    The Cambodia Movement for Health (CMH) lauded the Ministry of Economy’s guidance as a clear indicator of the government’s commitment to combat the health risks associated with cigarettes and tobacco products.

    Nonetheless, CMH Executive Director Mom Kong urged the government to extend the VAT to include non-cigarette tobacco products, as well.  

    Citing research by the World Health Organization, Kong stated that imposing an additional tax of KHR500 ($0.125) per pack of cigarettes could increase market prices by 15 percent. This, in turn, could potentially reduce the number of smokers by 30,000 in the next year, and prevent 10,000 premature deaths over the next decade or so.

  • Kazakhstan to Ban Vapes

    Kazakhstan to Ban Vapes

    Photo: natatravel

    Lawmakers in Kazakhstan voted on July 29 to ban the sale, import, export and production of e-cigarettes and liquids, reports Atlas News.

    “The harm of vapes is undeniable,” said Deputy Nurgul Tau. “That is why the Ministry of Health has been sharply raising the issue of introducing a ban on the circulation of vapes since 2021. In my request, I proposed a complete ban on the sale of vapes.”

    The legislation has been in the works since May 10 following a ban of the use of e-cigarettes in public spaces. The ban was triggered by concern about increased vaping among minors.

  • Korean Court Overturns PM Tax Refund

    Korean Court Overturns PM Tax Refund

    Photo: mnimage

    The Supreme Court of Korea has overturned a ruling that awarded Philip Morris Korea a tax refund, reports Business Korea. The case has now been sent back to the Suwon High Court.

    The dispute stems from 2014, when fiscal authorities announced new cigarette taxes that caused the price of pack of cigarettes to increase from KRW2,500 ($1.95) to KRW4,500 in January 2015.

    The National Tax Service (NTS) argued that Philip Morris Korea had sold cigarettes stored in purpose-build warehouses to wholesalers at an inflated price after January 2015, but had manipulated the sale to appear earlier in order to evade the additional special consumption tax that followed the price increase.

    When the NTS demanded tax payments of KRW99.7 billion, Philip Morris Korea challenged the decision, first the Tax Tribunal and then in court.

    The lower court accepted the company’s claim that the cigarettes in question were shipped to wholesalers in 2014, before the special consumption tax was applied.

    However, the Supreme Court viewed Philip Morris Korea’s temporary warehouses as a stopgap measure intended to accumulate as much inventory as possible before the price increase, in order to profit from the price differential later on.

    “Even if the computer system shows that the cigarettes were sold in advance before the tax increase, the special consumption tax should be levied based on Jan. 1, 2015, when the cigarettes actually moved from the temporary warehouses to the wholesalers,” the court said in its ruling.

  • Philippines: Partnership Against Illicit Trade

    Philippines: Partnership Against Illicit Trade

    Photo: sebra

    The Philippines Bureau of Customs (BOC) has partnered with tobacco companies to help combat illicit trade in the country, reports the Philippine News Agency

    “These groups [smugglers and illicit traders] have been very creative and aggressive in entering our markets,” said Bienvenido Rubio, BOC commissioner. “Accordingly, close cooperation with tobacco companies is aimed at addressing their various modus (operandi) with even more comprehensive methods.”

    The BOC met with Philip Morris International and Philip Morris Fortune Tobacco Corp. executives. Rubio said they will work together to ensure public health safety and fair tobacco trade.

    “That has always been our goal and our mandate—to put these smugglers away and make them accountable, answerable and ultimately face the consequences of their nefarious activities,” he said.

    “It is important for us to recognize that these (schemes) are not only very real threats but well-orchestrated plans aimed at circumventing our laws,” said Verne Enciso, customs intelligence and investigation service director.

  • JT Launches ‘With 2’

    JT Launches ‘With 2’

    Image: Japan Tobacco

    Japan Tobacco has launched With 2, its new infused tobacco vapor device, under the company’s respective new brand, With. It will be sold at convenience stores and tobacco stores in Japan beginning Sept. 5, 2023, and will be available for presale online from Aug. 7, 2023.

    With 2 is the first device of the new infused tobacco brand With. It features JT’s unique infused technology, which generates vapor while an atomized liquid passes through a capsule containing granulated tobacco.

    Since tobacco vapor is generated the moment it’s inhaled, there is no delay in delivery, JT explained in a press note. There is almost no tobacco smoke smell with the product since tobacco leaves are not directly heated. The device is equipped with a dual mode that allows consumers to switch between two heating modes at the touch of a button. The high mode produces 1.3 times more vapor than the normal mode, delivering a more intense flavor experience, according to JT.

  • Former Juul Exec Loses Contamination Case

    Former Juul Exec Loses Contamination Case

    Photo: Steheap

    A former Juul Labs executive has lost a case accusing the vapor company of shipping contaminated vaping pods to retailers and firing him in retaliation for complaining, reports Reuters.

    Siddharth Breja,  a former senior vice president of global finance, sued Juul in October 2019. He alleged that the company endangered consumers by refusing to recall mint-flavored e-cigarette nicotine pods or to issue a safety warning.

    Breja said he objected to the company re-selling products that were nearly a year old without a “best by” date on their packages. He said his complaints angered his superiors and that he was fired in retaliation in March 2019.

    Juul denied all claims and sought to have the case sent to arbitration. The federal court lawsuit was put on hold pending arbitration in March 2020.

    In a joint filing on July 27, lawyers for both parties said an arbitrator had ruled against Breja and ordered him to pay certain of the company’s legal costs. They did not give further details about the decision, but asked that the lawsuit be dismissed once Breja had paid the award.

  • JT Group Reports ‘Solid’ Quarter

    JT Group Reports ‘Solid’ Quarter

    Masamichi Terabatake | Photo: JT Group

    The JT Group’s revenues increased 9.9 percent to ¥1.39 trillion ($9.17 billion) in the second quarter of 2023, up 9.9 percent over the comparable 2022 period. Core revenue at constant exchange rates increased by 6.8 percent to ¥1.3 trillion, while adjusted operating profit at constant exchange rates increased by 4.7 percent to ¥434.3 billion. On a reported basis, adjusted operating profit increased by 6.7 percent to ¥442.8 billion. Operating profit increased by 8 percent to ¥413.6 billion, and profit increased by 8.7 percent to ¥287 billion.

    “The JT Group posted another strong set of results for the first half, said JT Group President and CEO Masamichi Terabatake in a statement. “In particular, the tobacco business reported solid growth across its indicators, driven by a more resilient industry volume and continued market share gains, as well as robust pricing.

    “Considering the accelerated investment towards heated tobacco sticks (HTS) in the second half of 2023, we have kept the full year forecast for adjusted operating profit at constant FX unchanged. On a reported basis, recognizing the current positive foreign exchange trend, we have revised upward our forecast, including the adjusted operating profit. Dividend per share guidance for full year remains unchanged taking into account our dividend policy at 188 yen per share. The interim dividend is 94 yen per share.

    As announced in February, we are accelerating investment towards HTS to establish the foundation of our future growth. Ploom X is now available in six markets, following the launch in the Czech Republic in June, and will be launched in Switzerland in September. Geographical expansion is on track with the expectation to complete launches in 14 markets by the end of 2023 and 28 markets by the end of 2024.

  • Mastermind Sounds Alarm Over Illicit Trade

    Mastermind Sounds Alarm Over Illicit Trade

    Photo: Axel Bueckert

    Mastermind Tobacco has asked the government of Kenya to crack down on the illicit cigarette trade, reports The Standard.

    “We are concerned at the growing level of illicit cigarettes making their way into the country, especially from Uganda,” Mastermind said in a statement.

    “We are the biggest losers in the market because when we have 80 percent of illicit products bearing the name of our product and are sold cheaply in the country, we will not be able to compete.”

    Mastermind said it is ready to work with government agencies including Kenya’s Inter-Agency Anti-Illicit Working Group and the Anti-Counterfeit Agency, regional bodies including the East African Community and COMESA as well as international organizations such as the World Trade Organization and World Health Organization to eliminate the illicit tobacco trade.

    “If we do not work together, we may be forced to shut down because we will not be able to compete against products that are not paying tax,” Mastermind Tobacco stated.

    A recent survey by its competitor British American Tobacco found that Kenya is losing up to KES6.5 billion ($45.67 million) annually in taxes as a result of the illicit cigarettes.

    An estimated one in every five products sold in Kenya is counterfeit and almost 4 million Kenyans are using counterfeit goods that include sugar, cigarettes, bottled water and cooking oil.

    Last month, the Kenya Revenue Authority in collaboration with the Inter-Agency Team destroyed an assortment of illicit goods seized from the market worth KES500 million with an estimated tax value of KES150 million.

  • ITC Plans To Spin off Hotel Business

    ITC Plans To Spin off Hotel Business

    Timon Schneider/Wirestock

    ITC plans to spin off its hotel business, separating it from its cigarettes and food units. The company intends to retain a 40 percent stake in the new entity, with ITC shareholders holding the rest.

    At its July 24 meeting, the board noted that the ITC’s hotels business has matured and is well positioned to chart its own growth path as a separate entity in the fast-growing hospitality industry with sharper focus on the business and an optimal capital structure, while continuing to leverage ITC’s institutional strengths, brand equity and goodwill.

    According to the board, the demerger will help the new entity in attracting appropriate investors and partners whose investment strategies and risk profiles are aligned more sharply with the hospitality industry.

    Driven by strong macroeconomic fundamentals and the Indian economy’s strong growth prospects, the Indian hospitality industry is expected to witness rapid growth going forward.

    “The proposed demerger of the hotels business is testament to the company’s commitment to creating sustained value for stakeholders,” said ITC Chairman Sanjiv Puri in a statement. “Creation of a hospitality focused entity will engender the next horizon of growth and value creation by harnessing the exciting opportunities in the Indian hospitality industry.”

    ITC’s largest revenue contributor is its consumer goods business, led by cigarettes.

  • Distributors Warned Over Unauthorized Products

    Distributors Warned Over Unauthorized Products

    Photo: Ljupco Smokovski

    The U.S. Food and Drug Administration has put ABS Distribution, EC Supply and Easy Wholesale on notice for selling and/or distributing multiple unauthorized e-cigarette products. The illegal products listed in the warning letters include the popular and youth-appealing e-cigarette products Elf Bar/EB Design, Esco Bars and Puff Max.

    “FDA is committed to keeping a finger on the pulse of the rapidly evolving e-cigarette landscape, including through a variety of scientific assets equipped to quickly identify products with high youth appeal,” said FDA Center for Tobacco Products Director (CTP) Brian King in a statement. “We will continue to use this data-driven approach to inform actions across the entire supply chain, including against those who distribute illegal products between manufacturers and the point of sale.”

    Warning letters are generally the first step once an inspection reveals a violation of the law. “We will monitor to ensure these violations are corrected, and if they are not, the recipient is at risk of further actions such as civil money penalties, seizures, and injunctions,” said Ann Simoneau, director of the CTP Office of Compliance and Enforcement.