Parliament recommends sugar tax examination

Parliamentary Committee on Industry, Trade and Tourism has finalised a two-day public inquiry on sugar production and pricing into the country with a call to government to examine tax arrangements it entered into with Illovo Sugar Company.

Under the current tax arrangement, a packet of sugar costs three times locally than in neighbouring Tanzania, Zambia and Mozambique.

The committee’s chairperson Paul Dumembe Nkhoma said in an interview yesterday that they summoned a number of stakeholders, including the Centre for Democracy and Economic Development Initiatives (Cdedi) who demanded Parliament to conduct the public inquiry.

Nkhoma said besides Cdedi, they also summoned Illovo Sugar Company, Salima Sugar, relevant government ministries, Beverages Association of Malawi (users of industrial sugar) and Mugisha Investments who were issued with two licences to import sugar.

The committee also invited Malawi Revenue Authority .

Said Nkhoma: “Cdedi demanded that we should hold a public inquiry on sugar production and pricing in the country so we were, actually, trying to address four questions which they raised on the issue.

“We received the evidence from all stakeholders and we will make a determination on whether Illovo sugar is, indeed, sold at a higher price locally than when exported.”

According to parliamentarian, they looked into tax arrangements government entered into with Illovo Sugar Company to the effect that a packet of sugar locally costs three times than when exported.

The committee also examined Cdedi’s demand for MRA, Ministry of Finance and other relevant government authorities to explain whose interest the sugar tax regulations were designed.

In an interview, Cdedi executive director Sylvester Namiwa welcomed the inquiry and said they presented their case “with a conviction that sugar prices must fall”.

Last month, Minister of Trade and Industry Simplex Chithyola Banda ordered Illovo Sugar Company, which has a 95 percent market share, to reduce the price of industrial sugar within seven days.

The dispute between government and Illovo was provoked after the ministry issued two sugar import licences to Mugisha Investments to import 20 000 metric tonnes of sugar, a development which Illovo Sugar protested.