eBusiness Weekly
Business Writer
BAT Zimbabwe’s tax contribution more than doubled in 2021 to $2,1 billion from $894 million in 2020 largely driven by Excise Duty and Corporate tax.
The group contributes to the Government treasury through various tax heads such as Excise Duty, Corporate Tax, Value Added Tax, Customs Duties, Pay as You Earn and Withholding tax.
“The Group’s contribution to the Zimbabwe Revenue Authority (“ZIMRA”) in taxes increased from $894 million in 2020 to $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,” Lovemore Manatsa, the group’s chairman said in the company’s annual report.
BAT Zimbabwe is the leading tobacco manufacturer in Zimbabwe by market share and is part of the British American Tobacco Group of Companies (“BAT”) and has been operating in Zimbabwe for over 80 years.
Listed on the Zimbabwe Stock Exchange (ZSE), BAT Zimbabwe manufactures and supplies cigarettes to approximately 6,600 retailers and wholesalers, who in turn service thousands of informal traders across the country.
In the 2022 national budget, Finance and Economic Development Minister, Professor Mthuli Ncube, increased excise duty on cigarettes from 20 percent and US$5/1 000 cigarettes to 25 percent plus US$5/1 000. Bulk of the country’s tobacco is exported in raw or cut reg form.
Zimbabwe exports 98 percent of its flue-cured tobacco as threshed or semi-processed (cut rag) and only a small percentage completes the whole production chain to manufacture cigarettes locally with BAT, Pacific Cigarette Company and Gold Leaf Tobacco leading the pack in cigarette manufacturing.
Manatsa said the group is confident that it is in a good position to navigate through the turbulent economic environment, but in the short term, anticipates a potential increase in the cost of production.
“Zimbabwe’s economy is forecast to continue on a growth trajectory as the country shrugs off the effects of the Covid-19 pandemic.
“We strongly believe that the Group will continue to perform to shareholders’ expectations. As the conflict in Ukraine continues to escalate, we continue to monitor developments in Ukraine and their potential impact on the Zimbabwean business,” he said.
