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Tax issues force firm to relocate to DR Congo

RIM Industries Limited, a Lilongwe-based beverages  manufacturer, is relocating to Democratic Republic of Congo (DRC) because it has not been considered for tax waivers, it has been learnt.

The company, which has a manufacturing company at Njewa along the Lilongwe -Mchinji Road, started its operations three years ago with a workforce of 15 but now employs 200 people.
According to Malawi Investment and Trade Centre (Mitc), the firm wanted tax waivers on excise duty, but to date it has not been accorded to them.

Chimbalu: The investor is moving out

Mitc spokesperson, Deliby Chimbalu, in an interview on Tuesday confirmed plans by RIM to relocate to DRC.
“It is true that this investor is moving out due to some issues concerning tax waivers. They wanted waivers on excise duty, something which could not just be granted to them as there are other players in the same sector subjected to the same taxes,” she said.

The firm’s director Ali Ahmad confirmed his company’s intentions to relocate to DRC because the operating environment is not stable and that Malawi Revenue Authority (MRA) refused to give tax exemptions to some products.

He said MRA is charging 10 percent excise on carbonated drinks and five percent on water, a development he said is increasing operating costs.

“The Malawi market is flooded with a lot of imported drinks which are cheap and are affecting local producers,” he said.

Ahmad claimed that that most of the traders who import carbonated drinks underdeclare their goods; hence, undercutting them.
MRA corporate affairs manager Steve Kapoloma could not be reached for comment.

But a source at the tax agency said the investor could have waited for the issue to be taken to Parliament because issues of tax waivers cannot just be decided by one entity.
When the company had just been opened, Ahmad had boasted that despite stiff competition on the market, they will survive.

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