The Centre for Democracy and Economic Development Initiatives (CDEDI) has written the Malawi Malawi Revenue Authority (MRA) Director John Bizwick on unfair sugar transfer pricing by the Illovo Sugar Company.
According to CDEDI Executive Director Sylvester Namiwa, the letter follows the parliamentary committee on trade and industry’s two-day public inquiry into sugar pricing and production, where the organisation had its presentation.
“It is interesting to note that Illovo is currently exporting industrial sugar at US$500 per ton to sister companies in Mozambique and Zambia, where it sells the same at US$850, while back home they are selling the same at as high as US$1,250 a ton.
“If the above is anything to go by, then as a country, we are being deprived an average of US$350 per ton, translating into around US$36 million. This outweighs the purported MK30 billion government collects from Illovo in taxes,” reads part of the letter copied to t he Minister of Trade and Industry, Minister of Finance and the Governor, Reserve Bank of Malawi.
Namiwa said their presentation was collaborated by a presentation by the industrial sugar users, who produced invoices as proof.
Illovo Managing Director (MD) Mr. Lekani Katandula through an article in The Nation online dated April 5, 2021 confirmed that indeed they were exporting sugar below the local price.
“However, during the presentation of a preliminary report to the Trade and industry consultative meeting held on July 18, 2023, Chaired by Simplex Chithyola-Banda, a correction was made by Paul Nkhoma on CDEDI’s presentation indicating that according to the invoices, the exported sugar is sold at US$750 and not US$850 as presented by CDEDI.
“Nonetheless, Illovo, which was represented in the meeting by the MD and the company secretary, did not dispute this submission. The same was the case during the public hearing, It is against this background that CDEDI is asking the Malawi Revenue Authority (MRA) to investigate this apparent clear case of transfer pricing,” said Namiwa
