Transcript TOBACCO INDUSTRY SEMINAR SUN ‘N’ SAND HOLIDAY …

TOBACCO PAYMENT SYSTEMS
BY
FELIX THOLE - TOBACCO ASSOCIATION OF MALAWI
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Preamble
Payment period Analysis
Bank Exchange Rate
Merchant/Bank Loan Common Account
Withholding Tax
Dollar payment
Conclusion
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Paper discusses payment challenges before and after
tobacco sales
Payment forms include remittance to market provider,
sales proceeds to growers, grower refunds ( O/D, D/D,
WHT), loan recovery, due payments to stakeholders,
payment to transporters, etc
Agents include, merchant, Market provider, commercial
banks, grower association, MRA, transporters, etc
Presentation for thought provoking and seeks your input
for a redress
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2.1 NORMAL PAYMENTS
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2.1.1 PRESENT SCENARIO
2.1.2 EXPECTED/IDEAL SCENARIO
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2.2. OTHER PAYMENTS
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• (PRESENT SCENARIO AND EXPECTED/IDEAL SCENARIO)
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Inconsistence between selling day and payment day
Exchange rate not displayed on seller sheet
Remittance delays after full repayment (Months)
Inconsistent deductions
Deductions on non beneficiaries
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Most small farmers not keeping farming transactions
Many profit margins below tax deduction threshold
Therefore suffer in silence
Refunds take months or years
3% deemed high
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6. DOLLAR PAYMENT
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Problems in proceeds share out for club members
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Industry must address the challenges to ensure
removal of the inequities along the tobacco value
chain.
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Your input is welcome