Government, Salima Sugar clash on tax holiday

By Isaac Salima:

Mist surrounds dictates of a deal between the government and Salima Sugar Company over tax remittances to the authorities, with the latter claiming they are still enjoying tax holidays.

The Daily Times has established that the company has not been paying some taxes to the Malawi Revenue Authority (MRA).

But in a telephone conversation on Monday, MRA Manager-Marketing Communications Wilma Chalulu asked for more time before she could comment on the matter.

In an interview, Salima Sugar Executive Chairperson Shireesh Betgiri said the company was given a five-year tax holiday in line with some of Malawi’s investment policies.

“We were given a five-year tax holiday which expires in 2023. We have papers on this. This is in line with investment policy by the Malawi Government. Other investors were given 10 or 20 years tax holidays but they said us being first government partners, we should be given five years,” Betgiri said.

In an earlier interview, the company’s secretary Charles Thupi confirmed that the company was given a tax holiday.

“Salima Sugar, like any other investor, has a tax holiday on imports for machinery for sugar production and irrigation. We are, however tax-compliant on all other taxes such as Paye [Pay As You Earn], withholding tax and other taxes not covered in the tax holiday.

“Malawi Revenue Authority normally checks our compliance in accordance with [Malawi] taxation laws,” Thupi said.

But, in a separate interview, spokesperson in the Ministry of Finance Williams Banda said the company was not given a tax holiday.

“There was no tax holiday that was given. Can you please share the agreement if it is legit,” Banda said in a phone interview.

He says the government was still servicing debt which it obtained to establish the company.

Commenting on the development, chairperson of Human Rights Defenders Coalition Gift Trapence, whose organisation last year asked the government to probe corruption allegations at the company, said the government should start collecting tax from the sugar-producing and marketing company.

“If the government is saying the company was not given tax holiday, then it should be collecting tax. If the company claims it was given the tax holiday, let it produce evidence,” Trapence said.

Salima Sugar Company Limited is a joint venture between the government and Indian investors.

Aum Sugar Company Limited from India has 60 percent of shares, with the remaining 40 percent held by the Malawi government through the Greenbelt Authority.

The company started in 2016 and employs over 4,000 labourers annually.