Chronicle Editor
Sikhulekelani Moyo
BRITISH American Tobacco (BAT) has contributed more than $17 billion to the treasury through different tax heads, the company has revealed.
In a statement accompanying its end-of-year financial results for the period ended 31 December 2022, the group, chairman Mr Lovemore Manatsa said key contributors to the group’s increased tax payments were excise duty, corporate tax and pay as you earn (PAYE), driven by increases in the selling price of their products and profit generated before taxation and rising inflation.
“The group’s contribution to the Government Treasury through various tax heads including excise duty, corporate tax, value-added tax (VAT), customs duties, pay as you earn, and withholding tax remains substantial.
“BAT Zimbabwe’s contribution to the Zimbabwe Revenue Authority in the year under review, increased from $11,0 billion in 2021 to $17,5 billion for the year ending 31 December 2022,” said Mr Manatsa.
On its financial performance, BAT Zimbabwe recorded a 50 percent increase in revenue amounting to $24,3 billion compared to the previous year.
“This was driven by price reviews and revenue generated from cut-rag tobacco and leaf export sales. These two income streams generated a gross profit of $18,3 billion which represents a 74 percent growth when compared to the year prior,” said the group chairman.
“Profit before tax for the year was finalised at $9 billion which reflects a 20 percent growth compared to the same period in the prior year. However, the revenue growth did not translate into similar growth in profit before the tax due to the impact of exchange losses. Group earnings per share increased to $287,43 from $277,11 in the year prior.”
The group also recorded 1 054 million sticks for the year under review, compared to 1 130 million sticks the previous year ending (ending 2021), resulting in negative volume performance for the period.
“However, despite increased power shortages and reduced disposable income, the group was able to deliver a strong performance that was only 6,7 percent short of the previous year. This volume drop was driven by the shortage of RTGS in the market which made it difficult for customers to purchase our products,” said Mr Manatsa.
“Further, the group established that the smart pricing mechanism implemented by the company resulted in higher pricing when compared to competitor trade prices in United States Dollars (USD).
“Separately, export volumes of cut-rag tobacco declined by 43 percent during the period under review compared to the prior year as a result of decreased export market demand.”
– @SikhulekelaniM1.
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