These new products do not fall in the classification of tobacco products existing in the Excise Duty Act and are therefore currently not subject to taxation.
“Innovations in the tobacco industry have led to introduction of new products such as nicotine pouches”, said Yatani.
“I propose to introduce excise duty on products containing nicotine or nicotine substitutes at a specific rate of Ksh 5.0 per gram.”
The minister said the rate of excise duty proposed is equivalent to the duty applicable to similar products under the Act.
The sale of Lyft nicotine pouches was halted in October 2020 by Kenya’s Cabinet Secretary for Health Mutahi Kagwe through a letter to the Pharmacy and Poisons Board, the agency that had approved the importation and sale of the products in Kenya.
BAT’s New Categories
BAT says they are evolving their portfolio with a wider choice of products, providing a modern alternative to conventional cigarettes
“It is widely acknowledged that most of the harm associated with conventional cigarettes is caused by the toxicants in the smoke produced by the burning of tobacco. Despite the inherent health risks, many people continue to choose to smoke,” says BAT in their website.
“The idea behind tobacco harm reduction is to encourage smokers who wouldn’t otherwise quit, to migrate to products that deliver nicotine without those toxic chemicals.”
With the new taxation proposal by the Government and acknowledgement of new products that are not tobacco but contain nicotine signals a comeback for the sale of LYFT nicotine pouches in Kenya.
BAT is yet to make any announcement on when they expect to start the sale of the nicotine pouches. Nonetheless, the new development indicate that the product may be back on the shelves in the next month.
Anti tobacco lobbyists are likely to be rattled by this move to legalise the sale of nicotine pouches.
Sh2.5 Billion Factory
BAT has already completed the first phase of its new Ksh.2.5 billion Nairobi based factory that will manufacture LYFT nicotine pouches for local sale and export market..
The factory is a central pillar in BAT’s diversification away from just the manufacture and marketing of cigarettes.
The Nicotine pouch has fast gained popularity among young people since being introduced in the market late in 2019; resulting to parents calling for further tests on the product.
Many users say it gives a feeling of being high in a very short span between placing it in the mouth and the time it takes effect.
The effects can be further heightened if one has been drinking alcohol.