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| Business |
| Govt reduces tobacco levies |
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by
Ephraim Munthali, 09 February 2004
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16:33:11
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Government has reduced levies on tobacco with effect from this season.
But some farmers have described the reductions as too meagre to increase their earnings from Malawi’s major foreign currency earner.
Tobacco Control Commission (TCC) general manager Godfrey Chapola, who announced the cuts in Ntaja, Machinga said the decision will encourage farmers to grow more tobacco.
TCC levy is now at 0.10 cents/kg from 0.13 cents/kg while Auction Holdings Limited (AHL) levy is now at 3.25 percent from 3.95 percent.
Hessian levy is now 30 cents/bale, down from 0.92 cents/bale and Tobacco Association of Malawi (Tama) is 0.70 cents/kg, down from 85 cents/kg.
“[The Tama levy] will only be applicable to those [growers] who want to be Tama members,” said Chapola.
Chapola said the Agricultural Research Extension Trust (Aret) levy remains at one percent.
Government has kept withholding tax at seven percent but exempts tobacco farmers earning profits of less than K36,000 ($340) from paying.
Tama has since complained about reducing their levy, saying it is unfair because the move would increase the transport burden for poor farmers.
“How will we maintain the satellite depots without the levy?” Queried Tama president Albert Kamulaga.
“Does government expect a poor farmer to transport, say, two bales of tobacco all the way to the auction floors?” He Wondered.
Tama rents about 81 satellite depots throughout the country where farmers take their leaf for transportation to any of the three auction floors—Lilongwe, Blantyre or Mzuzu.
One tobacco farmer from Ntaja said government should not cheat growers that they have cut the levy when the reductions are decimal.
“Either they give us meaningful reductions or they leave them the way they were,” said one of the farmers who refused to be named.
Another one said: “These people take away our money claiming it will be used to our benefit.”
“ Now, tell me, is it us farmers driving these beautiful cars parked here?” Asked another grower, pointing to a fleet of 4x4 vehicles that TCC, AHL and Tama officials travelled in to the Ntaja area meeting. |
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