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TOBACCO INDUSTRY SEMINAR SUN ‘N’ SAND HOLIDAY RESOLT (9 TH – 10 TH SEPTEMBER, 2013 )

TOBACCO INDUSTRY SEMINAR SUN ‘N’ SAND HOLIDAY RESOLT (9 TH – 10 TH SEPTEMBER, 2013 ). TOBACCO PAYMENT SYSTEMS BY FELIX THOLE - TOBACCO ASSOCIATION OF MALAWI. PRESENTATION SUMMARY. Preamble Payment period Analysis Bank Exchange Rate Merchant/Bank Loan Common Account Withholding Tax

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TOBACCO INDUSTRY SEMINAR SUN ‘N’ SAND HOLIDAY RESOLT (9 TH – 10 TH SEPTEMBER, 2013 )

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  1. TOBACCO INDUSTRY SEMINARSUN ‘N’ SAND HOLIDAY RESOLT(9TH – 10TH SEPTEMBER, 2013) TOBACCO PAYMENT SYSTEMS BY FELIX THOLE - TOBACCO ASSOCIATION OF MALAWI

  2. PRESENTATION SUMMARY • Preamble • Payment period Analysis • Bank Exchange Rate • Merchant/Bank Loan Common Account • Withholding Tax • Dollar payment • Conclusion

  3. PREAMBLE • 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

  4. 2. PAYMENT PERIODS ANALYSIS • 2.1 NORMAL PAYMENTS • 2.1.1 PRESENT SCENARIO • 2.1.2 EXPECTED/IDEAL SCENARIO • 2.2. OTHER PAYMENTS • (PRESENT SCENARIO AND EXPECTED/IDEAL SCENARIO)

  5. 2.1.1PRESENT SCENARIO ???

  6. 2.1.2 EXEPECTED/IDEAL SCENARIO ???

  7. 2.2 OTHER PAYMENTS

  8. 3. BANK EXCHANGE RATE • Inconsistence between selling day and payment day • Exchange rate not displayed on seller sheet 4. MERCHANT/BANK LOAN COMMON ACCOUNT • Remittance delays after full repayment (Months) • Inconsistent deductions • Deductions on non beneficiaries

  9. 5. WITH HOLDING TAX • 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 • 6. DOLLAR PAYMENT • Problems in proceeds share out for club members

  10. 6. CONCLUSION • Industry must address the challenges to ensure removal of the inequities along the tobacco value chain. • Your input is welcome

  11. THANK YOU ALL FOR YOUR ATTENTION

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