President Peter Mutharika has ordered the removal of withholding tax on tobacco sales of less than ten bales.
He made the announcement at the official opening of this year’s Tobacco marketing season in Lilongwe.
He was also joined by the Tanzanian President John Magufuli in calling for better prices.
“I would like to appeal to the buyers that despite the set limit prices don’t hesitate to propose better prices,” Magufuli appealed.
According to Mutharika, this will help tobacco growers to start enjoying the fruits of their labour.
Mutharika criticized tobacco buyers who dupe farmers by offering low prices, saying they will not be tolerated.
This comes as previous tobacco sales were regularly suspended due to disagreements between the growers and buyers.
Currently, Malawi earns 300 Million US dollars annually from tobacco sales.
Commenting on the issue, AHL Group Board Chairperson Margret Roka Mauwa announced the introduction of computerized systems which will see farmers being given their dues two hours after sales;
“To date we are opening markets in five major locations Limbe, Kanengo Chinkhoma Mzuzu and Kabwafu. Under these markets we have a combined capacity to handle up to 35 thousand bales of tobacco per day, from this season, we have opened six new business centers in various remote locations in the country,” Roka Mauwa said.
President Magufuli added that offering better prices to farmers could assists to improve their livelihood.
“There are two ways to purchase tobacco, through contract and auctions, this is a good arrangement but propose better prices so that you motivate them to produce more,” he added.
His call followed concerns raised by growers over poor prices on the first day of sales at Kanengo Auction floors.
Prices are ranging from 80 Cents to One Dollar 20 Cents, whilst for contract growers, prices range from One Dollar 30 Cents to Two Dollars 30 Cents.