British American Tobacco Uganda Limited (BAT Uganda) has announced the unaudited financial results for the six months ended 30 June 2022 registering positive performance.
Nicholas Ecimu – the Company Secretary revealed that the gross revenue increased by 12% to UGX50.7 billion while Excise Duty and Value Added Tax (VAT) increased by 10% to UGX25.6 billion, “largely driven by higher sales volume and an improved product mix.”
Consequently, net revenue increased by 14% to UGX25 billion.
“Total cost of operations increased by 16% to Ushs 19.6 billion, in line with higher sales volume and an inflationary increase in product costs driven by higher input costs globally. Profit after tax increased by 14% to Ushs 3.9 billion, reflecting the higher net revenue and partially offset by the increase in cost of operations,” said Ecimu.
He noted that taxes in the form of Excise Duty, VAT and Income Tax increased by UGX2.5 billion (10%) to UGX27.4 billion, driven by higher sales volume and profit.
According to him, the first quarter of the year was characterized by increased economic activity largely due to the lifting of the COVID-19 containment measures by the government.
dfcu Bank Partners with Jubilee Health to Launch BlueCare Health Insurance Solution“However, soaring fuel and commodity prices continue to strain consumer disposable income, negatively impacting the trading environment.”
Also, Ecimu says that illicit trade in tax evaded cigarettes remains a key challenge for them, and the overall economy.
“The prevalence of tax evaded illicit cigarettes in the market has persisted due to their significantly lower prices and, the lack of enforcement of the packaging and labelling requirements in the Tobacco Control Act, 2015 (TCA) and Tobacco Control Regulations, 2019 (TCR).”
“Estimated at 24% of the total market, illicit trade continues to deny the government tax revenues in excess of Ushs 30 billion per annum. We urge the relevant authorities to ramp-up enforcement against illicit and target products that do not comply with the packaging and labelling requirements of the TCA and TCR, as well as rooting out flows of illicit products from source and at border points,” he said.
“The Company continues to focus on ensuring business continuity, delivering shareholder value and working with relevant government agencies to ensure stability and predictability in the regulatory environment, which will support economic recovery.”
