BAT's tobacco tax payments equal SOE dividends
British American Tobacco Holdings (NZ) paid $801.2 million in excise tax last year – as much as the government reaped from all 16 state-owned enterprises, its accounts show.
BUSINESSDESK: British American Tobacco Holdings (NZ) paid $801.2 million in excise tax last year – as much as the government reaped from all 16 state-owned enterprises, its accounts show.
Profit rose 4.1% to $120.7 million in calendar 2011, according to the Auckland-based company's financial statements lodged with the Companies Office.
BAT's New Zealand unit makes Benson & Hedges, Dunhill and Lucky Strike cigarettes.
Sales slipped to $1.06 billion from $1.08 billion a year earlier, meaning three quarters of its revenue went to the government. It also paid $32.9 million in company tax.
The cost of sales increased to $864.3 million from $850.1 million. BAT spent $49.9 million buying finished goods from related parties and built its inventory to $338.2 million as at December 31, from $220.1 million a year earlier.
In March, BAT cut a deal with the Inland Revenue Department over historic tax avoidance, where the tobacco company used cross-border structured finance transactions that exploited loopholes in New Zealand's international tax law.
The tobacco distributer agreed to pay $15.6 million in tax and interest of $6.3 million, having previously provided in its accounts for almost $40 million.
Excise on tobacco is set to rise an annual 10% for the next four years after Finance Minister Bill English targeted smokers in the Budget to make a bigger contribution to returning to surplus in 2015.
Because of the addictive nature of tobacco, the hikes have been labelled an efficient way of raising revenue for the government by the Treasury, and the latest round of increases will swell the Crown coffers by $1.4 billion over the four-year period.
BAT was already contending with three years of 10% annual hikes as part of the government’s drive for a smoke-free nation by 2025.
The company returned a dividend of $162.9 million to its parent, the biggest return to the shareholder since Rothmans International was folded into the global group in 1999.
It did not pay a dividend in 2010.
Paul McBeth
Wed, 11 Jul 2018
Wed, 11 Jul 2018
© All content copyright NBR. Do not reproduce in any form without permission, even if you have a paid subscription.
BAT's tobacco tax payments equal SOE dividends
21900