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Bakhresa Grain Milling (Malawi) Limited, new owners of the privatised Grain and Milling Company, have asked government to impose a 40 percent import duty on wheat flour to check dumping and protect the local industry.
Tanzania-based Bakhresa Group of Companies executive director Abubakar Bakhresa said in an interview in Dar es Salaam on Thursday that Malawi is the only country in the Sadc region with zero import duty on wheat flour.
“Because of the zero import duty, Malawi has become a dumping ground for wheat flour most of which is of low quality,” said Bakhresa, son of the owner of Bakhresa Group of Companies.
And in a proposal paper on wheat flour tariff and tax review, Bakhresa Grain Milling (Malawi) said Tanzania imposes a 60 percent duty on wheat flour imports while Zimbabwe charges 30 percent, Mozambiaque 25 percent and in Zambia it is 1,100 Zambian kwacha per kilogramme.
Further to the 40 percent import duty proposal on wheat flour, Bakhresa also suggests zero excise duty and exemption from value-added tax (VAT) as is the case with maize and rice to promote successful growth of local wheat milling industries in the country.
Other countries in the region such as Mozambique, Tanzania, Kenya and Uganda charge zero VAT on wheat flour while in Malawi the 17.5 percent VAT is charged on both imported and locally milled flour.
“It is surprising to note that wheat flour [intermediate product] attracts surtax while wheat [the raw material] and bread [finished product] in the supply chain have no surtax,” reads in part the company’s tax and tariff review proposal paper.
Bakhresa Group, the largest milling company in east Africa, has ordered a new K872 million (US$8 million) 250 metric tonnes per day wheat mill from Buhler in Switzerland to increase wheat flour production and make the country self-sufficient in the product, according to Bakhresa.
The company’s Malawi general manager Mahesh Josyabhatla said the new plant is expected to be operational by November this year and will enable the country to export to Zambia and eastern Mozambique.
Currently, the company’s Limbe mill, with a capacity of 30 metric tonnes per day, is using machines aged about 30 years while Tanzania operations like the one at Buguruni in Dar es Salaam is seven year old technology.
Josyabhatla said the expected new Limbe mill is the latest milling technology.
Bakhresa Group of Companies has three mills in Dar es Salaam, one in Uganda and another in Zanzibar bought through privatisation process.
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