Benefits of trade incentives
Companies that were given tax incentives last year have commended government for the incentives as they have helped propel their businesses to full operational stage.
Six local and foreign companies, including Bio-Energy Resources Limited (Berl), Limphasa and Mtalimanja Sugar Corporations, Crown Pharmaceutical and Research Laboratories Limited, Sogecoa Shipping Centre and British American Tobacco (BAT) were granted some trade incentives as a way of promoting the business environment in the country.
In a telephone interview on Thursday, Mtalimanja Sugar Corporation proprietor, Napoleon Dzombe, indicated that they had trouble rolling out their production activities because they did not have a transformer which required K3.3 million (about $8 250) to be paid to Electricity Supply Corporation of Malawi (Escom).
Through the incentives, Nkhotakota- based Mtalimanja Sugar Corporation was refunded the value added tax (VAT) paid on their sugar mill and generators.
“When we got the money back, we bought the transformer and installed it. It will help us to start production. The delay in starting production, however, has been because Escom installed the transformer at our rice project site. As soon as the transformer is moved to the sugar site, we will start production,” he said.
On the other hand, Crown Pharmaceuticals chief executive officer Balakrishna Shibu said without the incentives, the cost of their products would have been higher, but now customers will benefit from low prices.
“We cannot get the required materials for the construction in the country. Apart from roofing sheets, bricks and sand, we have to import everything from other countries such as China, United Kingdom and others. The proposal for the incentives was only for items not manufactured in the country because the pharmaceutical company needs to meet the international requirements of current good manufacturing practices applicable to medicinal products,” he said.
Crown Pharmaceuticals is a $ 21 million (K8.8 billion) project of Polypack group of companies that will be manufacturing the pharmaceutical dosage forms in its manufacturing facility by August 2013.
Limphasa Sugar Corporation was given a tax holiday and waiver on duty on four-by-four vehicles. Bio-energy was exempted from paying all fuel levies except the ones from Malawi Energy Regulatory Authority (Mera) and also had a duty waiver on vehicles, building materials and machinery.
Sogecoa ,who constructed a shopping mall in the capital city, had a duty waiver on construction materials for the mall while BAT was given several incentives under Customs and Excise Act.
