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Castel future under threat

By Chimwemwe Mangazi:

MBILIZI—It is too premature for me to give a follow up

Malawi Revenue Authority (MRA) has pounced on one of the beverage producers in the country, Castel Malawi Limited, over dues in taxes.

The company has 1,284 employees with a business network of over 100,000 stakeholders, customers, suppliers, distributors and contractors, locally and internationally.

A press statement issued by Castel indicates that MRA has issued a final distrain notice against the company and yesterday, garnisheed Castel accounts.

According to the statement, which The Daily Times has seen, the development stems from the implementation of the calculation of excise tax for alcoholic beverages based on 90 percent of production cost.

“In September 2018, the Malawi Revenue Authority advised the company to start calculating excise tax based on ex-factory price (production cost + margin). At the rate of 90 percent, this will adversely affect the performance, cash flow and survival of the company,” the statement reads.

The company has indicated that it risks closure and withdrawal of Castel Group from the country due to what it calls unrealistic and unaffordable excise calculations.

In a telephone interview, MRA Head of Corporate Affairs, Steve Kapoloma, declined to comment on the matter, saying he had not seen Castel’s statement.

“First of all, I am not aware of that and I haven’t seen the statement. We talk to over 100 taxpayers, some have been fined some have received final distraintion, some have been garnisheed and a lot of other issues but we don’t comment on each one of them that, for company X, we are likely going to close next week, no,” Kapoloma said.

Castel Malawi Corporate Communications and Digital Manager, Titha Mbilizi, could not explain the company’s next course of action.

“It’s too premature for me to give a follow up on that,” Mbilizi said.

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