BAT tax payments equal all 16 SOEs
Wed, 04 Jul 2012 3:59p.m.
British American Tobacco Holdings (New Zealand), the local unit of the maker of Benson & Hedges, Dunhill and Lucky Strike cigarettes, 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 percent to $120.7 million in calendar 2011, according to the Auckland-based company's financial statements lodged with the Companies Office.
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 distributor 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 per cent 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.
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