According to third party research findings, the Tobacco market in Uganda saw an increase in illicit tax evaded cigarette sales in the first quarter of this year, standing at 22.2%.
This, according to the research, translates to an estimated loss in Government revenue of Ushs 30 billion annually.
“Whilst we applaud the Government of Uganda for steps taken to address the cost of doing business in this market, we reiterate that the trade-in illicit tax-evaded cigarettes continue to pose a threat to the legitimate tobacco industry and sustainability of Government revenues,” says BAT Uganda Chairman, Elly Karuhanga.
He adds that they are committed to continuing to engage the relevant Government agencies to tackle illicit trade in cigarettes and put in place necessary measures to protect legitimate businesses and safeguard government revenues.
Related, British American Tobacco Uganda Limited has announced its half-year results for the six months ended 30 June 2019; posting gross revenues of Ushs 86.2 billion and a profit before tax of Ushs 9.7 billion.
BAT Uganda Managing Director, Mathu Kiunjuri noted that the gross revenue in the first half of 2019, increased by 17% to Ushs 86.2 billion driven by growth in volumes due to distribution efficiencies and portfolio transformation.
“Profit from operations increased by 11% to Ushs 9.8 billion due to the growth in revenues, partly offset by higher cost of operations. The increase in the cost of operations was in line with volume growth, inflationary increases and additional investment in our brand portfolio,” said Kiunjuri.
He said profit before tax increased by 9% to Ushs 9.7 billion in line with growth in revenues, offset by finance lease costs recognized in line with revised accounting standards.
“Our contribution to Government revenues in the form of Excise Duty, Value Added Tax and Corporation Tax increased by 19% to Ushs 50.2 billion. However, illicit trade in tax evaded tobacco products continue to pose a threat to Government revenues and shareholder value,” stressed Kiunjuri.
“Going forward, I am confident that with the exceptional quality of talent within the Company and our partnerships with over 30,000 business partners, we have the right strategy in place to deliver business growth and continued value to all our stakeholders in the years ahead,” adds Karuhanga.
said they remain committed to building a sustainable partnership with the Government of Uganda, contributing to economic growth and delivering value for its shareholders.
