Castel threatens to close shop due to over taxation

castel malawi factory

Alcoholic and non-alcoholic beverage manufacturer Castel Malawi says its future is compromised if they do not find an amicable solution with government on tax issues.

The company has been going through a rough patch and has had to retrench a significant amount of its personnel to deal with the situation.

Helve’ Milhade, managing director for Castel on Wednesday left the country for Paris, France to present the situation to company executives.

On Monday October 7, government instituted an excise tax rate on malt beer of 60 percent.

Milhade said this is despite meetings explaining to the minister, parliamentary committees, professional associations the need to reduce the taxation on the pain rendering the company structural deficit.

A communication to the employees dated October 10 said the 60 percent ex-factory is higher for their operations as it now means they have been increased by a total of 30 percent on all item and 22 percent increase on clear beer.

“Our discussions, negotiations and confirmation letters have always proposed the Tax applied be ideal to enable us to have a win-win situation; where the country makes money in order to run healthy operations and in turn allow the government to collect tax that contribute to the development of the country,” reads part of the communication.

Milhade said they will do everything at their disposal to defend the operations of Castel citing that it is families, the economy as a whole which is being penalised.

Castel Malawi employees

“Everyone has to understand with more clarity how the Malawians industry, investors and how our families are treated,” Milhade said.

The MD has since called on government not to implement the decision which will put at risk the very future pride of the Malawi.

The recent communication to the employees says Castel will continue to retrench employees as they have not found a solution