By Ronald Kabuye
Civil society organizations advocating for tobacco control in Uganda have urged parliament and government especially the line agencies charged with financial monitory role to investigate the tobacco industry especially British American Tobacco BAT for tax avoidance.
According to the report titled “ashes to ashes, how British American Tobacco BAT avoids taxes in low and middle income countries” conducted in eight countries including Uganda by Tax Justice Network (TJN), Uganda losses at least 10 billion shillings through tax avoidance by BAT and its estimated that if nothing is done by 2030 the eight countries will lose over 700 US million dollars on the same account.
Addressing a press conference, Richard Baguma Tinkasimire, the national coordinator of Uganda Health Communication Alliance (UHCA) implored the concerned agencies not to shy away from conducting comprehensive investigations since the money avoided will cause much impact to our national budget.
He also called for the maximization of the excise duty charged on tobacco products to at least 70% as recommended by World Health Organization WHO.
“these tobacco companies must be set higher standards of transparency to ensure greater public accountability for their tax behavior and the tax authorities must approach tobacco companies with great skepticism and apply rigorous scrutiny to the claims they make” said Baguma.
The report indicates that BAT employs mechanisms that include cross border payments made within the multinational group for royalties, research, intra-group lending and dividends among others thus avoiding corporate tax charged on their profits.
Moses Talibita a tobacco control advocate wants the taxes collected from the harmful products like tobacco and alcohol to be ear marked to the health sector.
The report indicates that the money being robbed by BAT is vital resources to pay for public services like health care used to treat tobacco- related illness. In Uganda 80 billion shillings is the tax collected from the tobacco industries however the country spends 328 billion shillings in treating the tobacco related illness.
The report also indicates that BAT has been fined millions of US Dollars in various countries for avoidance of corporative taxes of which some of the countries include Brazil 100 million, Netherland 1Bn, South Africa 140 million, Bangladesh 200 Million, Egypt 130m among others.
The countries that this research was conducted from include Uganda, Kenya, Zambia, Bangladesh, Indonesia, Brazil, Guyana and Trinidad and Tobago.
The report comes at time when the world is preparing to commemorate the world no tobacco day on the 31st May 27, 2019. In Uganda the celebrations will be held in Entebbe Municipal Council