JTI South Asia Regional Vice President Manos Koukourakis reflects on a milestone of both personal and professional significance as JT International Bangladesh has been recognized as number one employer of the country. With 25 years at the company, he views the recognition as a reaffirmation of JTI's long held values across its global markets.
In an exclusive interview with The Daily Observer, Koukourakis also shares his views on Bangladesh's investment climate, the evolving tax environment, and the role of structural reforms in ensuring revenue sustainability and market stability. The Daily Observer's senior correspondent Mizanur Rahman took the interview. Following is the excerpt of the interview:
DO: JT International Bangladesh has been recognized as number one employer. How do you look at it?
Manos: We see this as a great source of pride and incentive. It is not only in Bangladesh, but across many markets where we operate, as JTI truly cares about its people and their well-being.
Personally, after 25 years with the company, I feel very proud to be part of an organization that is honest, genuine, and consistent in how it treats its employees. We follow local laws and regulations strictly and operate with full compliance in every country.
The sense of pride among our employees is very strong, and this is reflected in how they speak about the company.
DO: Running manufacturing, leaf processing and commercial operations in one country is complex. Where does Bangladesh enable operations, and where it test investors?
Manos: It is true that we operate across three divisions in Bangladesh, including manufacturing, leaf, and commercial operations. We employ more than 2,000 people locally and have built strong capabilities across all areas. Bangladesh enables operations through local sourcing, growing economy, and capable workforce. We are able to produce locally and even export leaf to other markets.
There are operational challenges, such as energy supply issues now, but these are not unique to Bangladesh. These are global challenges that many countries face. Importantly, when we approach the authorities, we find quick solutions. I would say Bangladesh is more enabling than restrictive for investors.
DO: Bangladesh is competing hard for quality FDI. What matters most to long term investors today?
Manos: The most important factor is predictability and stability. Investors want to operate in an environment where policies, regulations, and taxation are stable over time. Bangladesh has strong fundamentals. It has a population of over 170 million people, a young and capable workforce, and a strategic geographic location that provides access to a large regional market.
Political stability plays a key role. Investors want to see that a government has a clear mandate and can implement reforms over a longer period. If these conditions are ensured, Bangladesh can attract significantly more foreign direct investment.
DO: Speaking of policies, what remains the most complex issue for JTI as a long-term investor?
Manos: One of the key areas is taxation. Taxation is always a critical factor for investors, whether openly discussed or not. The current system in tobacco is based on an ad valorem structure, and the tax burden has already reached around 83 percent, meaning 83 percent of what consumers pay for a pack goes to government as taxes. At this level, it becomes very difficult to sustain long-term operations.
We believe that reforming the system can make it more effective, both for the government and for the industry. The objective is to ensure that the government continues to collect revenue while genuine businesses remain viable.
DO: From a technical standpoint, what limitations does a multi-tier, ad valorem cigarette tax structure create for revenue and market stability?
Manos: The main limitation is that it is not predictable. Since taxes are linked to price, any variation in pricing affects revenue outcomes. At the current level of around 83 percent, the system has reached its practical limit. There is only so far it can go.
Another important issue is that high taxation on legal products creates a gap that allows illegal products to flourish. When legal products become more expensive, consumers shift to cheaper alternatives that do not pay any tax. Studies suggest that illicit trade already makes up around 13-15% of the Bangladesh market, highlighting an existing challenge. This affects both revenue collection and market stability.
DO: Economists and health experts argue that specific excise structure would modernize tobacco taxation while generating more revenue and reducing consumption. What is your standing?
Manos: We agree with this view. A specific excise system, where tax is fixed per unit, brings predictability and stability.
Currently, Bangladesh collects around $3.3 billion from tobacco taxes. With a more structured system, this could potentially increase to around $4 billion, with consistent annual growth of about 9 to 10 percent. At the same time, consumption tends to decline gradually, and illicit trade can be better tackled. So, it is possible to achieve three objectives together through introducing specific excise. Stable revenue, reduced consumption, and improved enforcement.
DO: With tighter tobacco regulation now in place, what would make you confidently tell global investors that Bangladesh remains one of South Asia's most investable markets?
Manos: Bangladesh has strong fundamentals that make it an attractive investment destination. Like I said, its strength includes large and growing market, a competitive workforce, and a strategic location.
Industries like garments have already shown that Bangladesh can succeed as a production and export hub. Other sectors have now following that path yet.
What investors need is a stable and predictable environment. Political stability, consistent policies, and a balanced tax system are essential.
If these elements are in place, Bangladesh can continue to attract long-term investment and strengthen its position in the region.
