BEVERAGE maker, Delta Corporation Limited, has accused tax authorities of creating legislative positions, which create uncertainties for firms.
In its annual report for the period ended March 31, 2025, Delta noted how the business is finding it difficult to plan amid growing policy and tax uncertainty.
In May, Delta disclosed US$254,15 million in confirmed taxes, comprising US$230,35 million in indirect taxes — including value added tax, excise duties and the sugar tax — and US$23,8 million in income tax.
The indirect taxes and income tax were up by 19% and 516,52%, respectively, from the prior year.
If additional tax assessments of US$74,8 million, which the firm is appealing in the courts, are added to these paid taxes, Delta would pay US$329 million for the year under review.
“A growing concern is the tax authorities’ practice of creating their legislative positions through public notices, which may not be supported by enabling legislation. The law currently allows the tax authority to collect disputed amounts while the matter is under appeal through the courts,” Delta said in its annual report.
“This practice contributes to uncertainties, particularly when the tax positions adopted by the company concerning income tax and certain indirect taxes differ from those of the tax authorities. These taxation and legislative challenges necessitate careful navigation and robust tax planning to mitigate their impact on our business operations and financial performance.”
Delta revealed that the business is subject to numerous duties and taxes, including import duties, excise taxes and other levies.
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“These taxes can be adjusted with minimal notice, affecting pricing structures and consequently the demand for our products,” Delta said.
“The recent introduction of a sugar surtax on beverages at levels above regional benchmarks has led to price increases that have undermined business performance.”
Delta noted that the transition to the use of a local currency, followed by the reintroduction of multi-currency trading, was not accompanied by clearly defined transitional tax measures.
“This lack of clarity, along with complex and inconsistent legislative changes regarding the currency used for the settlement of certain tax obligations, has created significant challenges for businesses,” Delta said.
In that regard, Delta found the policy environment to remain unpredictable.
“The policy environment remains unpredictable and impacts our ability to plan for the future,” Delta said.
“To note are issues related to currency management, exchange control and bank use policies, which affect the access to foreign currency and local bank notes or digital money transfers, thereby affecting our ability to supply products and the ability of consumers to purchase our products.”
Delta added that the policies introduced to regulate the route to market had far-reaching impacts on the distribution strategies, market access and retail pricing.
As a result of these tax burdens, the firm had adjusted the prices of its products, leading to revenue of US$807,47 million for the period under review, up 5% from the prior year.
