British American Tobacco Uganda's Managing Director, Mr. Mathu Kiunjuri speaking at the media briefing held today at Sheraton Hotel-Kampala.
Industry Insights

BAT pays Uganda govt Ush90.5billion taxes despite illicit cigarette trade persistence

British American Tobacco (BAT) Uganda Ltd, has announced that its shareholders are set to earn Ush13.7 billion as dividends for the year ended 31st December.

A total dividend of Ush280 per share for the year 2018 was approved by the Company’s shareholders at its 19th Annual General Meeting that was held at Sheraton Hotel Kampala. It represents a 14% increase from the dividend that was paid in 2017.

According to the BAT Managing Director Mathu Kiunjuri, they will pay the dividends in line with their policy of 100% dividend payout, subject to withholding tax, on or before 21st June 2019, to shareholders on the company’s share register at the close of business on 31st May 2019.

A Tobacco garden.
A Tobacco garden.

“BAT Uganda also continues to contribute to Uganda’s socio-economic development through remittance of significant tax revenues to the government. In 2018, Excise Duty, Value-added Tax and Corporation Tax payments increased by Ush4 billion to Ush90.5 billion,” said Kiunjuri.

He said his company delivered a strong set of results despite the trade in illicit cigarettes on the market, estimated at 22% of all cigarettes sold in 2018.

These worrying levels he said not only impact their business and consumers, but they also deny the Government significant revenues, which if recouped, can contribute to the country’s economic development.

“Despite these challenges, we are excited about BAT Uganda’s future. Through its market-leading brands and future portfolio, talented people and valued partnerships, the company looks set to deliver continued value to its shareholders while investing in a sustainable and successful future,” noted Kiunjuri.

Dr Elly Karuhanga the BAT Chairman said this year, they had a gross profit of Ush104.2 billion but ended up with a net profit of Ush13.7 billion. This meant that Ush90.5 billion was paid in taxes.

“Despite the increase in tax remittances, we reiterate that illicit trade in cigarettes remains a key concern for business and the economy as a whole.

“We, therefore, continue to call upon the authorities to take urgent action to investigate the source of these products and put in place the necessary measures and safeguards to ensure a wholly legitimate market for cigarettes,” said Karuhanga.

Karuhanga said that they believe that a stable regulatory and taxation environment is crucial for business as well as for the government and consumers.

It should be remembered that BAT Uganda took the Government of Uganda to the East African Court of Justice over the passed Tobacco Control Act, which the government of Uganda lost.