Ministry of Agriculture has called for a review of taxes and associated charges levied on tobacco growers.
Deputy Minister of Agriculture Agnes Nkusa Nkhoma said this after inspecting tobacco sales at Lilongwe Floors on Friday.
She said a significant amount of money is taken away from growers’ earnings, rendering tobacco production less profitable.
Said Nkusa-Nkhoma: “Government would like to see growers happy, but we know that they are being heavily taxed.
“Growers on contract are also given a raw deal because they are offered inputs at high prices when actually they can buy inputs from elsewhere at reasonable prices.”
She said the ministry will engage Tobacco Commission, AHL Group, buyers, tobacco associations and all industry stakeholders to review the taxes and associated charges to ensure that growers are relieved.
For instance, tobacco growers are subjected to classification levy, research levy, Tobacco Commission (TC) levy, farm-to-satellite depot fee, association fee, withholding tax and hessian levy, among others.
Growers who produce less than 10 bales are also taxed three percent withholding tax.
TC chief executive officer Kayisi Sadala welcomed the suggestion, saying the taxes and deductions are too much; hence, the review is necessary.
He said: “We have always said that the prices on the market may not be that bad, but the heavy charges weigh down the anticipated gains for growers whether on contract or auction market.”
Some tobacco markets, except Limbe, which closed at the end of July, are expected to close by the end of this month.
Tobacco is one of the country’s important cash crops, contributing about 60 percent of foreign exchange earnings and roughly 13 percent to the national economy.