PTC Q32014 results: leading cigarette maker pays Rs 55.8 billion duties, taxes

A leading cigarette manufacturing company contributed Rs 55.8 billion to the exchequer in the form of duties and taxes during January-September 2014, which is up 23 percent as compared to the same period last year. It is learnt on Wednesday that Pakistan Tobacco Company has announced its results for the 3rd quarter of 2014, declaring net turnover of Rs 27.6 billion, an after tax profit of Rs 4.096 billion and an earnings per share of Rs 16.03. The company has also declared an interim dividend of Rs 3.
The company contributed Rs 55.8 billion to the national kitty in the form of duties and taxes which is a 23 percent increase over the same period last year and is even higher than its net turnover growth of 21.6 percent. Sources said the contribution of taxes has been increased from the tobacco sector following revision of excise duty slabs on all brands of cigarettes in budget (2014-15).
Through Finance Act 2014, the government had increased the rate of the federal excise duty (FED) on cigarettes. The rate of the FED would be Rs 2632 per thousand cigarettes in case the locally produced cigarettes if their on-pack printed retail price exceeds Rs 2706 per 1000cigarettes. The rate of the FED would be Rs 1085 per 1000 cigarettes where locally produced cigarettes if their on-pack printed retail price does not exceed Rs 2706 per 1000 cigarettes.
Finance Act 2014 applicable from July 1 had amended the Table-I of the First Schedule of the Federal Excise Act to specify new rates of the FED on cigarettes from July 1. The company has managed to declare good results and an impressive growth in government revenues despite challenging economic conditions including high inflation, security concerns, power crises, declining purchasing power of the consumers and ever-growing illegal cigarette trade.
While the revenue collection from tobacco sector is showing systematic growth in 2014, the illegal cigarette trade is becoming a grave concern as it is causing a huge loss to the exchequer. According to estimates, Pakistan has one of the highest incidences of illegal cigarettes which cause a loss of more than Rs 20 billion to the national kitty.