Tobacco sellers urge immunity from 2 % mobile transfer tax

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By Alois Vinga

BOKA Floors managing director, Chido Nyakudya says the 2 percent mobile transfer tax introduced last October by government must not apply on all tobacco related transactions to avoid erosion on tobacco farmers’ incomes.

“We are facing challenges with the 2 percent tax…and we are currently engaging the Finance Ministry over the matter,” Nyakudya told parliament’s lands committee Tuesday.

“For the farmers to be able to conduct their sales, the merchants need to bring the money to the country and the money needs to be transferred to us for auction purposes and we process the money through onward payments.

“In 2018 alone, we handled US$70 million on behalf of the merchants. Our revenue is less than 7 percent of this and if you then calculate 2 percent of the amount, it really takes a huge chunk.”

Nyakudya said in the past, farmers have been promised cash payments but have not received the money as promised.

This, she said, has triggered demonstrations, causing serious damage to company property.

“We are asking for the exemption of the tax on both the sellers and the growers. So, we are waiting for the Finance Ministry to give us a response on that,” she said.

Nyakudya also said they were facing foreign currency challenges for acquisition of critical supplies needed for the smooth running of the business.

These include bail tickets, conveyers, tow motors and repairs to facilities, among other requirements.

She also cited an increase unauthorised buyers who come to the firm’s facilities to “prey” on growers while offering them higher prices.

“We have tried to report them to the police but when they appear before the courts, the kind of penalties passed on them are not deterrent enough,” he said.