British American Tobacco’s net profits for the full year ended December 2016 has dipped by 15 per cent.
The firm’s profits stood at Sh. 4.2 billion. Despite this profit slump, BAT will pay out a Sh. 39.50 dividend per share.
The dividend pay will be subject to withholding tax and will be paid on April 27 to the shareholders on the register at the close of business on March 22, 2017.
This profit fall has been attributed to the introduction of excise duty and the use of excise stamps on cigarettes.
“Contribution to government revenues in the form of excise duty, value added tax (VAT), pay as you earn (PAYE) and corporation tax increased significantly by Sh3.1 billion to a record Sh19.2 billion in 2016. This increase was mainly driven by significantly higher excise duty and VAT from domestic business as well as a higher PAYE,” BAT said in the statement.
Additionally, the higher taxes and price rises saw the firm’s gross revenues increase by two per cent to . billion. The higher sales values were however offset by lower contract manufacturing sales. “Excise duty and VAT increased by 24 per cent to Sh16.8 billion driven significantly by higher excise duty following the implementation of a single tier excise regime on December 1, 2015. We grew market share in 2016 notwithstanding the diverse price increases on sales mix,” BAT stated.
