Market under watch

Business

By DALE LUMA
BRITISH American Tobacco (BAT) PNG Ltd will continue to monitor market activities following a Government decision to impose a 10 per cent increase in tax excise on cigarettes, according to an official.
In response to queries from The National, head of external affairs George Panao said the increase in excise rates came into effect on Dec 1 last year. “We are continuing to monitor the market and will be in touch if this situation changes in the future,” he said.
“It is the Government’s prerogative to set tax rates in the country and we will continue to work with the Government to find the best way forward for all parties.”
Panao initially stated when the decision was made by the Government during the 2020 National Budget last November, the company did not expect the Government to impose a big increase on cigarettes.
“We know the Government was looking for revenue and we gave our submission for the budget that showed revenue growth.
“But we did not expect a big increase, one of 10 per cent tax and indexation of five per cent biannually.”
The increase now results in the company paying more for everything that they sell plus it causes retail prices to rise.
The increase in tax excise is also imposed on alcohol manufactured in the country.
SP Brewery Ltd recently told The National that it expected to finish the 2020 year on “lower single digits” in terms of volume as a direct result of the excise increase.

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