Industry needs protective moves

The National Business

STRONG leadership, effective coordination between agencies and a focused effort of well-targeted actions are needed to tackle the illegal cigarette trade in Papua New Guinea.
According to a report released by FTI Consulting last week, PNG could lose K550 million in revenue as a result of the illegal cigarette trade this year alone.
FTI Consulting identified a series of actions aimed at severely hampering the flow of illicit tobacco products into PNG which include:

  • An independent taskforce to focus efforts on improved detection and enforcement of illicit tobacco (and other illicit goods);
  • improved detection of illicit tobacco and enforcement of existing regulations;
  • a review of existing legislation to ensure it reflects best practice, and to ensure that existing penalties and sanctions provide appropriate deterrence;
  • cooperative bilateral agreements with neighbouring countries focused on sharing information and coordinating enforcement actions among customs, tax and other authorities;
  • a review aimed at developing a better understanding of the market for brus; and,
  • a further review in three years aimed at evaluating the effectiveness of implementation measures and further adapting its strategies to deal with a changing market.

“If implemented, these and other actions should result in increased seizure and destruction of illicit tobacco, and increased government revenue associated with tobacco excises, duties and other taxes,” the report stated.
FTI Consulting’s report Illicit Tobacco in Papua New Guinea was presented to Prime Minister James Marape at the Port Moresby Chamber of Commerce and Industry breakfast. The report followed a request by the government last year for a comprehensive and independent market study to be undertaken examining the illicit tobacco trade in PNG.
The Government indicated that it was keen to develop a better understanding of the magnitude of the illicit tobacco problem to enable it to make well-informed and economically sound decisions aimed at preventing the illicit trade.