Tax hike spurs hoarding

Some cigarette brands are in short supply in Nepal’s Kathmandu Valley as sellers have started hoarding cigarettes in anticipation of an excise duty hike, reports Republica.

The government will unveil its budget for fiscal year 2016-2017 on Saturday.

“The market sees a shortage of tobacco products and liquors before the budget speech,” said Pabitra Man Bajracharya, president of Nepal Retailers Association. “Wholesalers and manufacturers keep huge volumes of cigarettes and liquors in stock as they are sure that the government will [increase the] excise duty.”

Cigarette manufacturers, however, claim that they have not reduced supply. “We have not cut supplies. In fact we have a policy of increasing supply by 10 percent every month based on sales figures of the previous month,” said a senior official of Surya Nepal, the country’s largest cigarette manufacturer.