Al Amin :
Launching of new products of Japan Tobacco International (JTI) in Bangladesh is facing obstacles due to policy shifting, exceptional SRO, ‘policy dichotomy’ on finished goods (FG) import and anti-competitive altitudes of the local authorities concerned, the company alleged.
In a letter to Bangladesh’s Finance Minister A H M Mustafa Kamal, Japan Ambassador in Dhaka Ito Naoki has reportedly made the allegations reportedly.
In the letter, the Japanese envoy said that the Japanese are carefully watching the government activities as JTI Bangladesh is a single largest flagship investment from Japan and the success of the JTI would play an important role intaking decision for attreacting potential investors of the country.
The ambassador said that the JTI had made the largest investment in the history of Bangladesh in 2018 and the company became the second largest contributor of revenue to the national exchequer.
But the business has been facing policy jolts one after another, he alleged.
In the letter, he said, “The tax hike was a diversion from the ‘usual pattern’ adopted for years and significantly hit JTI due to their reliance of medium segment of the market. The policy led to a halt in the growth of the tobacco sector revenue collection.”
“Any data analysts would show how the market has been polarized to lower priced and lower taxed part of the market, ultimately leading to loss of the government revenue. This is a clear example of policy inconsistency. The largest impact has been on JTI Bangladesh,” he added.
He further said JTI has been marketing couple of brands in the local market in the low segment namely, LD and more. “In November 2020, the brands launched line extension products in the market in the form of flavored capsule inserted cigarettes. Immediately afterwards there has been a move in the National Board of Revenue (NBR) to restrict those launches,” the letter said.
“The NBR made exceptional amendments in the national budget SROs to stop marketing of flavored capsule products below the medium segment. Effectively barring JTI’s new launchings, which protecting competitors,” it alleged.
The letter said since entering Bangladesh market, JTI has been facing ‘dominant’ and ‘anti-competitive’ behaviour and activities taken at the market levels through different ‘restrictive’ moves and such kinds of practices are not common in the international tobacco markets.
“To bring innovative products and to manage large capital expenditures, JTI had requested to the Bangladesh Commerce Ministry for necessary authorizations as per the clearly laid out HS Codes and duty structure for FG imports paying all necessary taxes equipment to SD and VAT,” it said.
“After repeated engagements, mysteriously JTI’s request was turned down. This is a ‘policy dichotomy’ as the import tax structure is very much existent in Bangladesh for tobacco products,” it said.
I think taking care of the existing investors is the best policy to bring new investment in the country from the view of fairness of competitiveness, Ito Naoki said.
He also sought the Finance Minister’s attention to look into this issue and to take necessary action to solve this problem.
