Govt goofs on wood products taxation

Minister of Industry and Trade Joseph Mwanamvekha has said some tax measures on raw materials used by wood- processing companies in the country are retrogressive to the economy and there is need for review.

The pronouncement by the minister comes after Raiply Malawi Limited, a wood- processing company, complained to government last week that some taxes, especially duty on its raw materials, were a burden to operations of the company and a threat to the economy.

Mwanamvekha, speaking during a tour of Raiply facilities, said government took a wrong approach on the tax measures.

He said it is surprising to note that government places duty on raw materials used by wood- processing companies such as Raiply that embark on value addition and export products when imported products are duty-free.

Mwanamvekha said government was penalising such companies with duty, yet they are doing value addition and exporting products, which will help the country move from aid dependent to trade dependent.

He said value adding and exporting is part of government vision of turning the country from a consuming and importing country to a producing and exporting country, which will help generate foreign exchange and create jobs.

“We are doing the opposite. We import duty-free products and our exports have duty. Imports have to be on the higher side.

“Something is not right [because] these companies are doing value addition and exporting, yet government is penalising them with duty,” said Mwanamvekha.

He said there is need for incentives for investors that are doing value addition and exporting, adding that government will engage a consultant to look into the matter.

Minister of Natural Resources, Energy and Mining Atupele Muluzi commended Raiply for  effectively managing natural resources as the company embarks on replanting of trees where it has harvested.

He said such sustainability of a forest and the investments are crucial to the economy.

Raiply chief executive officer Thomas Oomen said duty is a big burden on Raiply investments.

He said government has to consider waving duty so that the company can compete effectively on the international market and generate forex. n