Gov’t lost 4.5 bln Birr to cigarette smuggling, says enterprise

The National Tobacco Enterprise (NTE), member of Japan Tobacco International group of Companies, said that the government has lost 4.5 billion Birr due to cigarette smuggling in 2020/21 Ethiopian fiscal year.

“NTE paid 2.5 billion Birr tax to government last year. However, the government has lost 4.5 billion Birr due to cigarette smuggling,” Salem Sahilu, Anti-Illicit Trade Manager at Japan Tobacco International (JTI), said during a discussion on Monday at Hilton Hotel.

A survey conducted in 2012 shows that smuggled cigarettes seized 38% of the market. That figure soared to 44% in 2018 and 55.1% in two years later.

The share of smuggled cigarettes has been increased to a dramatic rate of 62.7% last year, according to Salem.

JTI has 37% market share and produces six brand cigarettes. However, over 70 products are being sold in the market, Salem said.

JTI is the sole tobacco producer in Ethiopia. “But, the major competition comes from smuggled tobaccos, which tests the company’s survival in the market,” as Salem puts it.

The illegal tobacco trade has impacted both the company and the government, Salem said, adding that both the government and the private sector should work closely to solve the problem.

The National Tobacco Enterprise (Ethiopia) Share Company (NTE) was established in 1942.

NTE is a Member of the Japan Tobacco International Group of Companies (JTI) – a leading international tobacco Products Company headquartered in Geneva, Switzerland. JTI owns 71% of the shares of NTE acquired from the Government of Ethiopia in 2016/2017 for USD 1 billion. This is the largest private sector investment by a Japanese company in Ethiopia to date.