A government official has addressed concerns from the world's second-largest tobacco company over alleged inconsistencies in taxation.
Financial Secretary John Rolle released a statement earlier this week in response to British American Tobacco's (BAT) claims that local distributers are paying lower taxes on tobacco products sold in the Bahamian market than the international firm.
"The excise law is being applied uniformly with respect to manufacturers and importers of tobacco," said Rolle. The government has not agreed to any concessionary rate for excise for local manufacturers and no importer has sought an audience with the Ministry of Finance on this matter."
Earlier this month, BAT stated that it was "deeply concerned" following reports that Freeport-based firm Caribbean Tobacco Enterprises (CTE) is paying less than the prescribed tax rate for tobacco products.
BAT asserted that any company "that is underpaying taxes deprives the country of legitimate revenue for national development. In the case of a tobacco company, this
situation is made worse by the fact that cigarettes are highly susceptible to smuggling."
BAT estimated that The Bahamas loses US$20 million annually "due to the illicit trade of tobacco products".
When specifically asked by Guardian Business earlier this year whether they paid the 15 cents per cigarette tax set out in the new act, CTE Managing Director Stunce Williams stated that the company was paying "what it is being billed" and argued that local companies should not be subject to the same tax level as their international counterparts.
CTE earlier suggested that a lower tax for local manufacturers and distributors was justifiable given their higher operating costs than international firms that purely export to The Bahamas. Williams declared that the company was prepared for a "David versus Goliath fight" over the tax issue.
Williams earlier denied claims that the involvement of the prime minister's brother, Kevin Christie, as a "lead sales person" at CTE had influenced its tax treatment.
The government implemented the Excise Stamp (Tobacco) Control Act in January of this year. A $5 million quarantine of international tobacco products was enforced after concerns were raised that stamps had not been glued strongly enough onto imported cigarettes.

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