Minister of Agriculture, Irrigation and Water Development Kondwani Nankhumwa says Capital Hill is currently reviewing all statutory levies governing the tobacco sector.
Speaking at a two-day 2019 Tobacco Industry Seminar in Lilongwe last week, the minister said the process was necessitated by the growing general outcry by most tobacco farmers over dwindling levels of profitability from the leaf.
“The ministry also took heed of the concerns from the industry and the tobacco growers on levels of profitability to tobacco growers. Government recognises the importance of proper reward to growers for the sustainability of the tobacco sector,” he said.
Nation Online understands that the issue of levies and fees on tobacco proceeds has been one of the highly contentious ones in the tobacco industry.
Over the years, tobacco growers have been complaining of being over-burdened by such perceived excessive taxation on their proceeds.
Currently, tobacco growers are subjected to classification levy, research levy, Tobacco Commission (TC) levy, association levy, floor operator levy, withholding tax and hessian levy.
As a way of addressing the concerns, Nankhumwa said his ministry engaged a consultant to review statutory levies applicable in the sector and informed the meeting that the consultants are in the final stages of consolidating the findings.
“My ministry will share the report once it is ready. It is the expectation of my ministry that the recommended rates shall be complied with in line with the [Tobacco Industry] Act,” said Nankhumwa.
He said government is also aware of unauthorised charges within the tobacco industry which he said has been reducing the take-home income of tobacco growers.
Going forward, the minister said the new Tobacco Industry Act has now made it mandatory for stakeholders not to effect any charges unless done in line with the law.
Following the review process of the levies, it is expected that the new schedule of levies will be gazetted through the regulations, which are currently also being reviewed.
TC board chairperson Inkosi Ya Makhosi M’mbelwa VI described the 2019 tobacco season as a success as there were no major market disruptions.
He also said the industry also registered strong collaboration and engagement as spearheaded by TC.