CIGARETTE producer British American Tobacco (BAT) Zimbabwe recorded an 822 percent increase in tax contribution to the Zimbabwe Revenue Authority (Zimra) driven by solid growth in profitability.
In 2022, the cigarette manufacturer’s tax contribution amounted to $12,5 billion.
BAT Zimbabwe chairman Mr Lovemore Manatsa, in a statement accompanying financial results for the year ended December 31, 2023 said the taxes were drawn from various tax heads that include Excise Duty, Corporate Tax, Value Added Tax, customs duty, Pay As You Earn, and Withholding Tax.
“The group and company’s contribution to Zimra in the year under review increased from $12,5 billion in 2022 to $115,2 billion for the year ending December 31, 2023.
“Notwithstanding the challenging economic environment, the group and company recorded a remarkable financial performance for the year ended December 31, 2023 delivering 147 percent and 101 percent growth in revenue and profitability before tax respectively compared to the same period last year (2022),” he said.
The group and company’s total volumes as of December 31, 2023 declined by five percent to 1 003 million sticks from 1 054 million reported in the corresponding period in 2022.
Mr Manatsa said this was due to the challenging operating environment as the credit defaulting rate from the firm’s customers increased.
As at December 31, 2023 export volumes of cut rag tobacco were 282 940kg, reflecting a 32 percent decrease from the 2022 volumes.
During the year under review, BAT Zimbabwe’s selling and marketing costs rose by 109 percent compared to the prior year and administrative expenses also increased by 46 percent versus last year (2022).
The increase in costs was attributable to the significant devaluation of the currency which led to suppliers revising their prices and charging more for their goods and services.
“Nevertheless, the group and company recorded a significant increase in profit after tax of 131 percent compared to the prior year. The amount recorded for the year ended December 31, 2023 was $55,4 billion and the earnings per share increased to $2 684,85 from $1 163,51 in the prior year.
“In view of the profit for the period under review, the board proposes the declaration of a final dividend of $ 1 186,70 per share,” said Mr Manatsa. – Herald
