CDEDI wants MRA to investigate Illovo over Sugar transfer pricing


The Centre for Democracy and Economic Development Initiatives (CDEDI) has asked the Malawi Revenue Authority (MRA) to investigate IIIovo Sugar company over transfer pricing of sugar to other countries.

CDEDI Executive Director Sylvester Namiwa made the statement on Thursday during a press briefing in Lilongwe.

Speaking with reporters, Namiwa said that they have written a letter to MRA to investigate on the transfer pricing because their findings show that Illovo Sugar Company is currently exporting industrial sugar at US$500 per ton to sister companies in Mozambique and Zambia, where it sells the same at US$850, while back home it are selling the same at as high as US$1,250 a ton.

He added that if the above is anything to go by, then the country is being deprived an average of US$350 per ton, translating into around US$36 million which outweighs the purported MK30 billion government collects from Illovo in taxes.

“The above statement was collaborated by a presentation by the industrial sugar users, who produced invoices as proof. When this matter was brought to the public, the Illovo Managing Director (MD) Mr. Lekani Katandula through an article in The Nation online dated April 5, 2021 confirmed that indeed they were exporting sugar below the local price.

“However, during the presentation of a preliminary report to the Trade and industry consultative meeting held on July 18, 2023, Chaired by Hon Simplex Chithyola-Banda, a correction was made by Hon Paul Nkhoma on CDEDI’s presentation indicating that according to the invoices, the exported sugar is sold at US$750 and not US$850 as presented by CDEDI,” he explained.

He went on to say that Illovo, which was represented in the meeting by the MD and the company secretary, did not dispute this submission and the same was the case during the public hearing.

Namiwa said that CDEDI is asking the Malawi Revenue Authority (MRA) to investigate this apparent clear case of transfer pricing.