From: The Times of Central Asia
TASHKENT, July 13 (TCA) — High rates of excise tax on cigarettes in Uzbekistan create conditions for cigarette smuggling, Olzhas Bibanov, Communications Manager at the Japan Tobacco International (JTI) Kazakhstan, told reporters.
“The Uzbek government may increase the revenues from the excise tax if it gradually equalizes tax rates on local and imported tobacco products. It would also increase competition in the tobacco market,” said Bibanov.
Presently, the excise tax is 10,739 soums (US $5.7 at the exchange rate of Uzbekistan’s Central Bank) for 1,000 filtered cigarettes produced in Uzbekistan and $13 on imported cigarettes.
According to JTI, the volume of the cigarette market in Uzbekistan is 17 billion cigarettes per year, while the share of a local producer (BAT Uzbekistan) reaches 90%.
Bibanov said that high rate of import excise tax in Uzbekistan creates conditions for smuggling. Currently, a majority of contraband cigarettes in Uzbekistan come from Kyrgyzstan, Kazakhstan and Tajikistan. At the same time, contraband cigarettes go on from Uzbekistan to Turkmenistan.
Earlier it was reported that the Uzbek-British joint venture British American Tobacco Uzbekistan (BAT Uzbekistan), which is the exclusive manufacturer of tobacco products in Uzbekistan, in 2011 reduced production by 15% compared to 2010 to 11.8 billion cigarettes.
The volume of exported cigarettes at the joint venture over the past year fell by 6.5% to 690.2 million. Sales of tobacco products by the joint venture in Uzbekistan’s domestic market for 2011 decreased by 14.5% to 11.05 billion cigarettes.
According to BAT Uzbekistan, the total volume of legal tobacco market products in 2011 in Uzbekistan decreased by 15%. This, in particular, is associated with an increase in cigarette smuggling to Uzbekistan, mainly in the lower price segment.
