Illovo Sugar Malawi has expressed dismay at the government’s intention to extend the 40 percent corporate income tax for businesses making over K10 billion.
Initially, the tax was only charged on the banking sector as a modality to facilitate the sector’s contribution towards rebuilding the economy after cyclone Freddy hit early in 2023.
In an interview on the side-lines of the company’s annual general meeting in Blantyre recently, Illovo Sugar Malawi Chairman Jimmy Lipunga said the reference to K10 billion profit is arbitrary because one has to look at the level of investment that is put.
“Certainly, it is not very good news for us, and I don’t think it’s good news for companies in general.
“In order to stimulate growth of new enterprises, you actually should be going the other way. You should be reducing taxation, because then that reduces the cost of capital,” Lipunga added.
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But in a separate interview, President of Oilseeds Producers and Processors Association Peter Ngoma said the tax measure brings fairness, which is one of the key principles in taxation.
Presenting the 2024-25 national budget, Minister of Finance Simplex Chithyola Banda said the government recognises that other sectors make similar profits with the banking sector, hence the move.
