Major victory for BAT Uganda as EACJ stops new duty on regional imports

The East African Court of Justice has ruled in favour of a petition by BAT Uganda against sections of the Excise Duty (Amendment) Act 2017 which sought to impose duty on cigarette imports to Uganda from the East African countries.

The court determined that the interpretation and implementation of the challenged provisions of the Act was discriminatory and contravened the EAC Treaty and Protocols to which Uganda is a signatory.

BAT East & Central Africa Head of Legal and External Affairs, Simukai Munjanganja applauded the regional court for the landmark ruling which he notes set a precedent “in terms of protecting the rights and commercial interests of not just BAT Uganda, but other industries which
operate lawfully within the EAC.”“Not only does the judgment safeguard the letter and spirit of the EAC Treaty and Protocols, but we believe that it will provide an opportunity for fair competition by levelling the playing field for products from EAC partner states. This will in turn stimulate much needed economic growth in the EAC region,” said Munjanganja.

BAT Uganda Managing Director, Mathu Kiunjuri added: “We would like to reiterate that we support the formulation of balanced and equitable laws. As one of the few national Authorised Economic Operators in the country, BAT Uganda
has a proud track record of tax compliance and is rated among Uganda’s largest tax payers.

“As a committed corporate citizen, we will continue to support the Government of Uganda and engage with relevant stakeholders towards realization of the full benefits of EAC regional integration.”

On 9th August 2017, the multinational firm that has been operational in Uganda for 90 years, filed a petition against the Excise Duty (Amendment) Act 2017 (the Act) in the East African Court of Justice (EACJ).

The petition was filed on grounds that the enactment and implementation of some of the provisions of the Act were discriminatory and in contravention of the EAC Treaty and Protocols.

They contested the imposition by the Act of a higher Excise Duty on cigarettes imported from other EAC Partner States, which is up to 36% higher than cigarettes produced locally.

The EAC Treaty and Protocols which prohibit EAC partner states from enacting domestic tax laws that discriminate against goods from other partner states.

The firm sought and were granted an injunction to stop the implementation of the Act pending the Monday’s judgment.

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