Castel Malawi risk closure: MRA gets garnishee order for brewer’s bank accounts
Castel Malawi Limited, formerly Carlsberg Malawi Limited, is at risk of closure due to continued decline in sales volume, turnover and heavy excise tax rate.
This was announced by Castel Malawi Managing Director Herve Milhade in a memo on Monday, June 17 to its members of staff.
Milhade said over the past few years, Castel Malawi has struggled to maintain business profitability due to mostly unfair conditions set by Malawi Revenue Authority (MRA), who have since taken over the company’s accounts.
“In 2013, the Malawi Revenue Authority confirmed calculation of excise tax for alcoholic beverages be based on 90% of production cost,” Milhade said in the memo.
In 2013, the tax collector confirmed the calculation of excise tax based on production cost.
“In September 2018, Malawi Revenue Authority advised the Company to start calculating excise tax based on ex-factory price (production cost + margin). At the rate of 90% this will adversely affect the performance, cash flow and survival of the company.
“As recently as Thursday, 13th June, 2019, I met with top MRA officials, Mr. Tom Gray Malaya, the MRA Commissioner General and Mrs. Nellie Jimmu — Commissioner of Domestic Taxes. However, these efforts have failed and the MRA has issued a final distraint notice against the Company.
“Today, Monday 17the June, 2019, the Malawi Revenue Authority has garnished Castel Malawi Ltd accounts. This action by MRA mean that Castel Malawi Ltd is at risk of closure and the withdrawal of Castel Group from the country due to unrealistic and unaffordable excise calculations.”
However, Milhade assures his employees that together with his management team, he will continue to put every effort to rectify the current situation to sustain operations and their commitment to employees, customers, consumers and the general public.
“I will dedicate my time to turn things around because this fight is not only for Castel Malawi Ltd but for all Malawians,” he said.
However, a source within the company confided with this Nyasa Times that the MD indicated at a staff union meeting they had that the owners are considering leaving the country opting for Zambia, citing unfavorable economic environment and unstable political environment.
The source says the government milks the company by demanding payment on top of the excessive taxes it is being charged with.
“There is a crisis meeting in the boardroom Confederation by the management team and staff union to discuss the way forward,” said the source.
According to a document sent to this publication by the company’s Corporate Communications and Digital Manager Titha Mbilizi, the tax MRA is charging is exorbitant to the company.
”These actions by MRA mean that Castel Malawi Ltd is at risk of closure and the withdrawal of Castel Group from the country due to unrealistic and unaffordable excise calculations,” she said.
Mbilidzi adds “The position the Company finds itself in, means the potential end of a beverage legacy for the country and this means a Malawi without brands with such strong national heritage such as SOBO Squash, Malawi Gin, Premier Brandy; A Malawi without Carlsberg Beers, A Malawi without The Coca-Cola Franchise, A Malawi without Castel Beer.”
The company further sponsors football from a grass root level through its Copa Coca-Cola trophy which targets secondary schools and professional football through the Calsberg Cup and employs about one thousand, eight hundred eighty-four workers.
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MRA is a Government agency responsible for collecting taxes. MRA does set Tax Rates. Tax Rates are set by the Ministry of Finance.
DPP is forcing MRA to milk business to bail out Jane Ansar that’s why these managers are commiting fraud.
While the majority of Malawians are at risk of losing their jobs, Muthalika and his cronies are busy sharing public positions. They have no motivation to ensure companies like Castel or Peermont stay operational. I hope Castel employees who voted for APM get employed in the public service should the company close.
MRA is an Authority which just follows the set law. I have issue and problems with the Ministry of Finance. It is either they have no idea what the corporate world requires to thrive and grow, or they are intentionally sabotaging the economy of our beloved country.
How do you explain all the closing down of the once productive industries such as Lever Brother, BAT, PEW. I will not even mention the subsidiaries of Press.
Ministry of Finance, immediately review our tax regimes for local industry and make it pro local Malawi production. Do not punish local industry for trying to produce local.
This is forcing the importation of goods and in the process exporting jobs.
Act with urgency. 90% and you expect a local product to compete with imports.
Let us grow the local tax base and not that of other countries. I dream and look forward to a prosperous Malawi.
Problem with multinational companies like Castel is that they always want to lower the tax bills. Carlsberg was in Malawi for 50 years, paid their tax quietly because it was part owned by Press Corporation
Fellow Malawians, be informed that the aim of excise tax is mainly to discourage consumption of the goods/service and not necessarily to collect money for government.
Inunso ngabodza inu. Apa if the government do no want people to consume beer as you claim, why not just barn it. Why not just barn beer drinking and tobacco smoking.
Meaning government wants to discourage drinking? But don’t they collect money in the process. Are you sure they haven’t calculated how much more they can get. Why not keep the formula constant.
Remember it is a Malawi Revenue AUTHORITY and not a service as depicted in other jurisdiction
Pay your taxes. Drive a Nissan Tiida. Pay your taxes. Stay in a two bedroom house. Pay your taxes. Go on holiday to camp- site near chileka. Pay your taxes……….or just use tippex.
We have the names of the criminals from MRA !
This Castel M.D. is meeting wrong people, these tariffs are set by some Revenue based Economists at Ministry of Finance, revenue dept, and these guys all they care about is revenue, MRA is not at fault here , they are only enforcing rates as per government policies sheet. This guy needs to take his fight to treasury or Ministry of finance. Or else you castel lovers will soon be drinking Frozy.
One of the retired boss told me in his office when i went in with my complaont at these offices saying the govt wants 100 million from mra thus all these high taxes ukamakenga katundu now the junior staff kulowaposo eish. A country with no standards aliyese kumangochaja mmene pakhomo pashotera. No wonder even ma polisi ,road traffic kunyumba kukdutsa galu wakuda amamgovala uniform kukamaimitsa magalimoto with mare stupid milandu if at all. Laye camera kukaima pamwala ,ngati akwele mu ntengo.
5 stops within 5 miles. What a FUCK
Peermont Hotels the manager of BICC and president hotel is leaving the management contract in July. Why? Because DPP government officials ziphuphu, they go there and ask for businesses corruption. So they heard a little longer hoping that may a new government will come in. When the DPP Tipp-Ex government was declared to be the winner, Peermont decided to pack and go because they can no longer take this corrupt government. What does not mean to Malawians? Loss of livelihood, because people will lose jobs. So here 200 jobs lost. And then Castel packs up and goes, and 200 jobs lost. So how long will Malawians sit aside and watch this stinking corruption?
Blind talk. Some of us knows Peermont issues really well and will urge you to rather celebrate their exit and not cry for them. BICC and the hotel have not had political interfearance but peermont has been stealing from Malawians. For your own information, our hotel has always been number 1 or 2 revenue generating machine in the Peermnt group ever since it was opened yet Peermint has been failing to service the hotel’s loan at CDH Bank. They have not been paying government a single penny as per agreement, in short govt and Malawians have not benefited anything eversince Peermont came. Some of us who know the issues have been praying for the day Peermont would leave and when we hear you complaining we feel sorry for our beloved Malawi
So now we mustn’t have Fanta and coke?? Abale malawi ameneyo
This is going to be the normal pretty soon. Every day we wake up there is going to be a firm announcing their closure due to the stupidity of MRA taxes and corruption. This governing DPP government is slowly bringing us to the smelly-toilet we should not even be near. This is due to the DPP’s corruption practices. My fellow Malawians, are we that stupid that we will just sit idle and let these mafia to ruin our beautiful country?
I urge all of my fellow Malawians to take part in the demo coming up in a few. We need our voices heard, very loud.
We need to protect our land for our children and great great grand children. Lets come together and protect Malawi.
this is very bad, MRA is a day light robber who is robbing on behalf of DPP and MUTHARIKA
Tippex Government milking companies so they can steal more money for political activities. Buy presidency and MPs and politicians from other parties. muoona. Castel, just hold on we will clear the mess within shortest period possible
MRA is there just to milk businesses. Malawi will never develop if MRA doesn’t stop involving itself in politics or being controlled by politicians. I hate MRA now with all my heart. It’s not being realistic even to small business.
MRA is an enemy of businesses. MRA is disguises itself as a tax collecting body but it is a servant of DPP stealing money from small businesses and large enterprises.
MRA is filling up a hole being left behind by the corruption money DPP has been stealing. DPP is party of thieves. We will fight until DPP government is out.