BAT hails reduced inflation, contributes $2, 1 billion taxes

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By Alois Vinga

LISTED cigarette manufacturing concern, British American Tobacco (BAT), has hailed authorities for easing inflationary pressures after posting a lucrative annual financial performance, which saw the entity contributing a total $2,1 billion towards the country’s taxes.

Presenting the company’s annual report for the year 2021, BAT managing director, Kimesh Naidoo, commended authorities for wresting the inflationary tide from a high of 837% to the current relatively stable rates.

“There was notable improvement in the trading environment in the period under review, driven by the slow-down of inflation as well as decreased exchange rate volatility.

“We remain optimistic that more policies will be employed that will continue to improve the economic environment in Zimbabwe,” he said.

He, however, said the issue of blocked funds remains a challenge to the business, and expressed hope that engagements with the RBZ  to normalise this were of paramount importance during the year under review.

“This will remain a key focus in 2022 to ensure the company continues to deliver value for its shareholders. The group’s blocked funds were listed as approved blocked funds under Annex 1 of the Finance Act (No 7) of 2021, (gazetted on 21 December 2021),” he said.

The group contributes to the government treasury through various taxes, including Excise Duty, Corporate Tax, Value Added Tax, Customs Duties, Pay as You Earn and Withholding Tax.

“During the period, the group’s contribution to the Zimbabwe Revenue Authority in taxes increased from ZW$894 million in 2020 to ZW$2,1 billion for the year ended 31 December 2021. The key contributors of the increase in tax were Excise Duty and Corporate Tax, driven by the increases in selling price of our products and the profit generated before taxation,” said Naidoo.

He added that during the review period, the group recorded an increase in volume of 25% from the sale of cigarettes and 74% from the export of cut-rag tobacco.

Net profit attributable to shareholders for the period under review was ZW$1,4 billion, compared to a net profit of ZW$98 million in 2020, recording a growth of 1,327%. Basic Earnings per share increased to ZW$80.61 from ZW$5.65 generated in the previous year.