China: Hongta Group Pays Record Amount of Taxes on Cigarette Inventories

Source from:  TobaccoChina Online 10/29/2012

Hongta Group in southwest China’s tobacco-producing Yunnan Province – a leading Chinese tobacco manufacturer – paid a record amount of 26.5 billion yuan (4.2 billion U.S. dollars) in national taxes on cigarette inventories from January to August, a sharp increase of 3.49 billion yuan (554 million U.S. dollars), or 15.2 percent, over the same period of 2011.

Specifically, the amount of value-added tax on cigarette inventories reached 5.06 billion yuan (803 million U.S. dollars), up 9.1 percent year-on-year; the amount of consumption tax on cigarette inventories reached 20.41 billion yuan (3.24 billion U.S. dollars), up 19.2 percent year-on-year; and the amount of corporate income tax on cigarette inventories reached 1.03 billion yuan (163 million U.S. dollars), down 17.7 percent year-on-year.

Hongta Group attributed the sharp growth in taxes to its sustainable growth in cigarette sales and also sustainable improvement of the structure of cigarette sales.

From January to July, Hongta Group sold 123.4 billion cigarettes (2.468 million cases) taxable in Yunnan Province, an increase of 11.1 billion cigarettes (220,000 cases), or 9.9 percent, year-on-year.

From January to July, Hongta Group sold 41.85 billion cigarettes (837,000 cases) with the single-case sales price at 70 yuan (11.1 U.S. dollars) and higher (with a consumption tax rate of 56 percent), an increase of 8.1 billion cigarettes (162,000 cases), or 24 percent, year-on-year. In the seven-month period, the sales of cigarettes with the single-case sales price at 70 yuan (11.1 U.S. dollars) and higher accounted for 33.9 percent of the total cigarette sales by Hongta Group, up 3.86 percent year-on-year.

As a result of cigarette sales growth and structural improvement, Hongta Group registered rapid growth in cigarette sales income in the first seven months. From January to July, Hongta Group earned a total of 50.13 billion yuan (7.96 billion U.S. dollars) in taxable sales income, up 15.5 percent year-on-year, with the increment of cigarette sales income basically on a par with the increment of taxes paid.  Enditem