By Patience Abeck
BLANTYRE-(MaraviPost)-The country’s alcoholic beverages Castel Malawi has cut ties with Football Association of Malawi for the Carlsberg Cup sponsorship.
Castel Malawi’s brand and communication manager Twikale Chirwa confirmed the development.
The development comes barely some weeks after formerly Carlsberg Malawi Limited was reportedly 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.”
The Castel Group decision comes also amid uncertainty future of the Airtel top 8 which leaves the country with only one stable Cup,Fisd Challenge