The Dominican Republic is the leading cigar exporter to the United States. Now Dominican ambassador to the United States, Sonia Guzmán is helping the Dominican tobacco industry to lobby against a US Congress proposal to hike taxes on tobacco and nicotine products. The House Democrats have included the provisions in a US$3.5 trillion spending plan underway in Congress. The measure may increase the taxes on both cigarettes and cigars.
As reported in Listin Diario, a Dominican delegation will travel on Monday, 25 October 2021 to Washington, D.C. to address the issue with US legislators. Industry & Commerce Minister Victor (Ito) Bisonó, heads the mission. The objective is to present to the legislators how the increase in taxation will impact thousands of Dominican producers, the country’s exporters, employment in 13 agricultural provinces, and foreign exchange generation.
The bill reads:
Sec. 138504. Increase in Tax on Certain Tobacco Products and Imposition of Tax on Nicotine. This provision doubles the current rate of excise taxes on cigarettes, small cigars, and roll-yourown tobacco. The provision changes the tax on large cigars from an ad valorem basis to a weight basis at the rate of $49.56 per pound, but not less than 10.06 cents per cigar. The provision provides larger increases in tax on smokeless tobacco (i.e., snuff, chewing tobacco, and pipe tobacco) and a new tax on discrete single-use units at the rate of $100 per thousand. The definition of roll-your-own tobacco is expanded to include certain processed tobacco.
The provision also proposes a floor stocks tax on cigarettes and small cigars, with a de minimis exemption amount of $1,000. The effective date for cigarettes, small cigars, and smokeless tobacco is calendar quarters beginning after the date of enactment of this Act. The effective date for large cigars, discrete single-use units, and taxable nicotine is calendar quarters beginning 180 days after the date of enactment of this Act. Sec. 138505.
Read more:
House of Representatives
Listin Diario
CNBC
25 October 2021