Members of the Syndicate of Authorised Cigarette Importers in Cameroon commonly known by its French acronym, SICC, are fuming at a recent increase in customs duty on imported cigarettes by the Minister of Economy and Finance, Polycarpe Abah Abah. By Joe Dinga Pefok
They believe the increase was done under the influence of the multi-national British American Tobacco, BAT, company headquartered in Yaounde.
The Post gathered that the General Manager of BAT, Alain Schacher, addressed a letter dated April 4, 2005, with Ref No. BAT/SO/CORA/Ad/Nº 018 - 05 to the Minister of Economy and Finance, on the protection of local industry.
In the letter, Schacher complained that the authorised importer of Business Club Cigarette has reduced the price of a carton of the cigarette from FCFA 125.000 to FCFA 118.000. He said such a reduction is against fair competition, and thus unacceptable. He said the price reduction also puts to question the attempts to harmonise prices of the different categories of cigarette, which put the minimum price of a packet of cigarette at FCFA 400.
Schacher went on to present BAT's two proposals to the Minister. The first proposal was that the Minister should, as a matter of urgency, give instruction to the tax officials in the field to carry out a very strict control of the customs duty and other tax documents of the Douala-based importer of Business Club. In addition to the proposal he said all members of the distribution chain of the cigarette across the country should also be strictly controlled.
The second proposal, according to our translation, read: "And that, as mentioned in our correspondence of March 15, the Minister should urgently give instructions to the Director of Customs that the minimum duty for a carton of cigarette should move from FCFA 60.000 to FCFA 80.000 and as having taken effect from April 2005."
Minister's Reaction
In what is being considered by SICC as a reaction to the proposal of BAT, the Minister of Economy and Finance, Polycarpe Abah Abah, on April 29 signed order No. 051187/MINEFI of April 29, 2005, Modifying Ministerial Order No. 660/CF/MINEF/CAB of 23 December 2004, fixing minimum taxes on imported cigarettes. The imported cigarettes are placed in two categories.
The Ministerial order, which took effect from the date of signature, April 29, 2005, states that the minimum tax on a carton of cigarette in the category which used to be FCFA 60.000, moves up to FCFA 80.000. This increase is the same as BAT proposed. Cigarettes in this category, according to the Ministerial order, include Aspen, Fine, Business Club, Delta, etc.
As for the second category of cigarettes, which include Benson & Hedges, Marlboro, Dunhill, Craven, Rothmans etc, the new minimum amount to be paid as customs duty for a carton was raised by the Ministerial order to FCFA 250.000.
The Minister, in the order, charged the Director of Customs as well as the Director of Taxes with the strict implementation of the new tax rates.
Audience With Minister
SICC, which has as President Mrs. Celestine Courtes, has been growling since the April 29 Ministerial order was released. The members, who are mostly based in Douala, do not seem to understand how a multi-national company can tell the Minister to increase taxes for other competitors in the market, and the Minister goes ahead and does it.
The President of SICC told reporters who contacted her in Douala on May 13, that the syndicate was trying to arrange for audience with the Minister of Economy and Finance, to possibly take place this week.
The Syndicate intends to present its protest to the Minister against what it sees as an unfair tax increase.
SICC, which sees BAT as an unfair competitor, is questioning how the company could instead qualify the decision of the importer of Business Club to reduce the price of the cigarette as unfair competition. It notes that fair competition in the market among other things, should normally see a producer or his agent striving to offer a product of high quality for a possible lower price, so as to attract more consumers.
The Syndicate is also bitter with the insinuation by BAT that the importer of Business Club might have been involved in tax fraud.
The Syndicate has also noted that since the Minister's recent order, local officials visit the business houses of all cigarette importers as well as wholesalers in Douala, almost on a daily basis, in the name of carrying out strict control. This, the Syndicate sees as harassment of its members for no justifiable reason as they always strive to fulfil all their fiscal obligations to the state.
Wholesalers of cigarettes in Douala, who are mostly at the Mboppi wholesale market, on May 13, concerted on the possibility of taking a common stand against BAT products, in protest against the tax increases.
The wholesalers, who indicated that their final position would be made known this week, note that it is from the sales of imported cigarettes that they and other members of the long chain, make profits.
Recent Comments