British American Tobacco Uganda (BAT Uganda) will pay its shareholders Shs 15.7 billion (Shs 320 per share) as a first and final dividend for the year ended December 31, 2019 after a majority vote favoured the resolution during the company’s annual general meeting that was held on July 23.
The fee that was paid in advance on June 19 in line with the company’s 100 percent dividend pay-out policy was a timely income injection for Ugandan shareholders amidst economic impacts of the Covid-19 pandemic.
Philemon Kipkemoi, a non-executive director at BAT Uganda, while addressing a press briefing, explained some of the strategies the company took to survive the after effects of Covid-19 on the business environment in Uganda.
“As a result of the pandemic, government introduced other measures and restrictions… So, we had to come up with a business continuity plan. In this plan, we prioritized three things, namely: keeping our staff and employees safe by providing them with personal protective equipment (PPE) to keep them out of harm’s way. We also made sure that we revised how we looked at the market presently to be certain of business continuity. Lastly, we looked at reviewing our business processes to ensure that we are ready when the pandemic goes.”
BAT Uganda chairman Elly Karuhanga commended BAT Uganda for its resilience and delivering strong business results on the back of a challenging operating environment.
Adding: “BAT Uganda continues to contribute to Uganda’s socio-economic development through the remittance of significant tax revenues to the government. In 2019, the company’s tax payments increased to Shs 96 billion...”
BAT Uganda Managing Director Mathu Kiunjuri, however, decried the level of illicit cigarette trade.
“According to independent third-party research, approximately 19 per cent of cigarettes sold in Uganda are illegal. These worrying levels of illicit trade not only impact consumers who unknowingly purchase these products but also government revenues and the legitimate tobacco market,” he said.
“Tax-evaded illegal cigarettes continue to deprive the government in excess of an estimated Shs 30 billion every year. This is revenue that is desperately needed to support the country’s economic recovery given the adverse impact of Covid-19.”
Kiunjuri further called upon the Ugandan authorities to ratify the World Health Organisation’s protocol to eliminate illicit trade in tobacco products.
“Ratification would provide a robust framework for the implementation of global standards in fighting illicit trade, optimizing benefits of the Uganda Revenue Authority’s Digital Tracking System and helping to tackle illicit financial flows.”