BATBC shares fall over NBR’s 2013 tax claim
Shares of British American Tobacco Bangladesh (BATBC) dropped by around 1 per cent yesterday following a DSE web post where its auditor said the multinational still faces Tk 1,780 crore of retrospective tax demand from the National Board of Revenue (NBR).
The issue is pending settlement at the court.
On November 23, 2013, the NBR's Large Taxpayers Unit demanded the value-added tax and supplementary duty, the BATBC said in its annual report. The unit claimed to have found that the BATBC sold its Pilot and Bristol brands of cigarettes as a low segment product instead of a medium one, it added.
"The claim was initiated based on a competitor's complaint," said the report.
On July 25, 2018, the Supreme Court's (SC) Appellate Division, based on a BATBC appeal, ruled that the claim was unfounded and, therefore, unlawful and the BATBC received a copy of the SC ruling this year, said the auditor.
The government filed a civil review petition against the SC ruling in March 2020 and hearing on it is now pending, it said.
Dhaka Stock Exchange (DSE) publishes auditors' reports from time to time and yesterday it happened to have published that of the BATBC for 2020.
As trade for the day began, the cigarette-maker's stocks rose more than 7 per cent.
Sometime later, the DSE published on its website the auditor's report which contained a paragraph titled "Emphasis of Matter" containing the information regarding the tax claim.
An "Emphasis of Matter" paragraph is used in such reports whenever an auditor considers it necessary to draw users' attention to a matter presented or disclosed in the financial statements.
Right after the post was published, the shares gave up the early gains, said stock investors.
The BATBC stocks closed 0.98 per cent lower at Tk 592.
Investors are not sure whether the money has to be paid or not, so there was an impact on the stocks, said Mir Ariful Islam, head of research of Prime Finance Asset Management Company.
The stocks rose on the last two trading days, so there was an impact of profit being availed as well, he said.
On the previous two trading days, the BATBC stocks had advanced around 18 per cent, showed the DSE data.
The multinational company provided 600 per cent cash dividend and 200 per cent stock dividend for the year ending on December 31.