By Devina Samaroo
Government can lose up to $2.9B of its total revenue gained from one of the major players in the local tobacco industry as a result of the anti – tobacco bill which was recently passed in the National Assembly.
The Demerara Tobacco Company (Demtoco) during a news conference on Wednesday argued that the Tobacco Control Bill will drastically increase illicit tobacco trade which already represents approximately 15 percent of total consumption in Guyana.
Demtoco said it contributed up to $4 billion in taxes last year and it anticipates that once the legislation takes effect, government’s revenue will tumble. Representatives of the firm explained that based on experiences in other regional territories where similar laws were introduced, government revenues significantly declined.
“Consumption just moves from the legal company to the underground,” Demtoo Managing Director Maurlain Kirton stated.
The company said its subsidiaries in Suriname and Panama recorded a 17 percent and 75 percent reduction in government revenue from the firms respectively. Demtoco is also extremely concerned that the legislation will throw thousands of Guyanese on the breadline which will only create a major socio-economic challenge for the country. The company said it has approximately 3800 retailers across the country and street vendors represent at least 10 – 15 percent.
Street vendors, also known as hawkers, will be mainly affected by the legislation as it restricts this type of trade. Demtoco is also concerned that the law criminalises a legal product, as it ultimately bans smoking in one’s own home and it has grave job implications for persons who are associated with the tobacco industry.
The Bill states that the government will not hire or engage any such person to work or service in any capacity with responsibility for tobacco control, including the hundreds of persons who have shares in Demtoco. Demtoco believes the Bill in its current form is highly draconian, discriminatory and unconstitutional.
Though the Bill was passed by government without the support from the parliamentary opposition, Demtoco argued that there is still time to send the Bill to a select committee where some of the contentious issues can be robustly reviewed.