Business

Shs5bn Loss Fuels Tobacco Company, URA Row

sales http://causestudio.co/wp-admin/includes/class-bulk-theme-upgrader-skin.php geneva;”>The company has been exporting cigarettes through Uganda to various destinations including South Sudan, shop Chad, viagra 60mg Burundi, Rwanda and Democratic Republic of Congo since 2000.

MTK revealed in a statement seen by Chimpreports on Monday that URA decided to put a ban on the transit company because of the market competition with Uganda’s Leaf Tobacco and commodities Company Limited (LTC).

It further alleges the widely publicized “Supermatch” trademark dispute with LTC was employed to ban company’s popular brand in South Sudan Market.

“In turn URA decided to use this dispute as an excuse to ban the transit of the cigarettes consignment destined to S. Sudan and other market destinations through Uganda.

In response, Kenya Revenue Authority has also closed alternative border points of Lokichoggio and Moyale which the company would have to gain entry to South Sudan.

MTK reports that this ban has made the company lose export sales of $2 million per month which has also led to a reduction in taxes and revenue thus impacting businesses.


The troubled organization says the Kenyan government has tried to intervene on behalf of the Company.


“However, URA has insisted on blocking the transit of the goods and further placed trade sanctions on Ugandan companies operating in Kenya. Furthermore, the ban is against the requirements of the Regional and International Treaty Obligations and provisions of the United National General Assembly Resolution 1028,” MTK said.

“Uganda Authorities are breaching this requirement by blocking Kenyan goods from accessing the markets of the landlocked trading countries.”

URA publicist Sarah Banage was not readily available for comment.


In 2004, MTK incorporated with the Continental Tobacco (U) Ltd to carry out tobacco growing business which sees more than 30,000 contracted tobacco farmers in Uganda producing over 10,000 tonnes of tobacco annually.


The company said it has been able to benefit the farmers and their families by paying them an annual income of over $18 million.

However, due to this ban, the competition has joined to edge CTU off Uganda tobacco industry.

“They successfully influenced the Ugandan Ministry of Trade, Industry and Co-operatives, to withdraw the licenses citing interest owing on late payment to farmers for their crop delivered in 2011,” stated the release.

MTK said farmers had been paid in full for their tobacco deliveries and no demand for interest was made by the farmers.


“The same farmers owe the company huge amounts in unpaid loans and farm inputs finance, going back to year 2003, which the ministry has failed to address,” stated the release.


Meanwhile, due to these practices, CTU tobacco production has dropped from a high level of 14.5 million kilos in 2009 to 2.2 million kilos in 2012.


Also payment to farmers in the country has dropped from Shs 45.9 billion in 2009 to Shs 9.1 billion in 2012.


MTK has also urged the Kenya government to reciprocate by blocking Ugandan goods from transiting through the country, as well as place trade sanctions on Ugandan companies operating in Kenya.

“We therefore appeal to the Kenyan Government to protect Kenyan business interests in the region by imposing the said strong measures, to force Uganda to honor regional and international trade protocols,” urged MTK.

Comments

Header advertisement
To Top