Sogavare pushing for local tobacco (lekona) to be taxed

Minister of Finance and Treasury Manasseh Sogavare has announced in parliament today that the government will start applying tax on lekona (local tobacco) which he estimated to be a $35m-$40m loss revenue per year to the government.

Speaking in Parliament in response to the Speech from the Throne, Sogavare said: “When we increase the price of tobacco people are moving to the unregulated one. It is cheaper but more dangerous. It does not have a filter,” Sogavare makes the statement in reference to lekona or safu as it is called in some dialects.

In response to the tax gap, the former PM said his ministry is working on taxing the locally made tobacco.

 “It’s a loss of about $35m to 40m a year. I was a bit shock to learn of this one,” the minister told parliament.

He has also spoken out against a competition policy in the tobacco space.

 “We achieved nothing by advancing a policy of competition,” he points out.

Sogavare instead wants this policy to be taken back to the draw board.

He states that right now there are a number of people who are importing cigarette and it is a conflict of government policy.

“We want to discourage it but we also encourage competition. It is a conflicting policy that needs to be relooked at,” Sogavare highlights.

As per the taxing of lekona, he said his ministry is working on it and very soon they would be approaching cabinet on this matter.

Lekona is sold at markets in Honiara and is very popular amongst the grassroot people. In the absence of cigarette, many smokers turn to lekona because it is cheaper and available.