Business

Let’s stop illicit tobacco trade

KABANDA CHULU, Lusaka
THERE is need to stop the illicit trade in tobacco that currently stands at about 30 percent (400 million sticks) of the total market share, British American Tobacco (BAT) Zambia chairman Michael Mundashi has said.
And the company has recorded a two percent increase in gross revenue from K166 million in 2015 to K169.9 million in 2016 despite the drop in volume that was driven by the price increase that was taken at the beginning of the year.
However, operating profit dropped to K19.5 million from K30.8 million recorded in 2015, due to a rise in product cost which accounted for 63 percent of the drop in total operating profit.
Releasing financial results for the company, Mr Mundashi said the recent stability of the Kwacha has had some minimal positive impact on the cost base of the operations since BAT’s working capital is mostly maintained in various foreign currencies.
“These gains, however, have to a major extent been offset by the effects of the new excise legislation that was implemented by Government. Also, our volumes dropped during the period under review on the drawback of the highlighted changes in our operating profit.
“We are, however, optimistic that we still continue to grow our market share and continue to satisfy our consumers due to the quality of the product that we bring to the market,” he said.
Mr Mundashi said Government is losing out millions of Kwacha in unpaid taxes.
“The continued presence of illicit products on the market is a source of concern for us as it is an indication of that Government is losing out in unpaid taxes. We will continue working with Government to ensure that this leakage is sealed thereby improving inflows to the treasury in support of the national development agenda,” he said.

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