In light of the government raising excise duties on locally manufactured tobacco products by 20 per cent, the Chairman of the West Indian Tobacco Company (WITCO) Anthony Phillip has expressed that the company would have to adjust.
In an interview with the Business Guardian, Phillip said: “There is an excise increase, we would just have to accept it because the government has a responsibility, cigarettes is an excisable product and when it comes like this, it is never really a surprise, it just means we have to make adjustments in our business to make sure that we look after the stakeholders’ interest.”
Phillips added that this means all stakeholders, which includes customers, shareholders (a category within which the government falls) and employees.
The Government of T&T owned 13,646,136 shares in WITCO, which it transferred to the National Investment Holding Company Ltd to finance the payments of the National Investment Fund (NIF) bond.
Thus far, the WITCO has paid $31.6 million ($10.5 million in 2018 and $21.1 million in 2019) in dividends to the National Investment Holding Company Ltd.
In the current circumstances where the country is facing many challenges due to the impact of COVID-19 pandemic, Phillip said that he was not taken aback with the fact that Minister of Finance, Colm Imbert looked at cigarettes as a way of trying to raise additional revenue.
Imbert, in his budget presentation remarked that there is a need to curb the consumption of Tobacco. He added that worldwide, tobacco use is the single largest cause of preventable death, killing around 6 million people every year.
The Finance minister revealed: “We are currently spending $500,000 per year to treat just one lung cancer patient. For too long, we have had to deal with the negative consequences associated with the high consumption of these products.”
According to Imbert, the harmful use of tobacco products bring significant social and economic losses to individuals and society at large.
He asserted that tobacco use accounts for one in 10 adult deaths worldwide and Tobacco kills up to half of all users, noting that it is a risk factor for six of the eight leading causes of deaths in the world.
Unchecked, Imbert said that tobacco-related deaths will increase to more than eight million a year by 2030, and 80 per cent of those deaths will occur in the developing world.
It is in light of this, the Minister of Finance noted that the government will implement, not only a 20 per cent increase in excise duties on locally manufactured tobacco products, but it will also increase customs duty by 20 percent on imported tobacco from the Common Market Origin.
He added: “We will adjust the customs duty payable on tobacco products imported into Trinidad and Tobago from extra-regional sources to have it receive equal treatment to that of the common market.”
Meanwhile, with these measures taking effect from October 20, 2020, Philips said: “WITCO is a very resilient company and we adhere to all the laws of the land and we always respect the views of the government.”
For the six months ended June 30, 2020, WITCO net profit of $194 million. This represented a $16.14 million or 7.68 per cent decline.