Business
Business captains for tax cuts in next budget
December 23, 2021 / Bester Kayaye
The Malawi Confederation of Chambers of Commerce and Industries (MCCCI) has advised government to review some of the existing taxes in the forthcoming 2022/2023 national budget in order to stimulate private sector growth.
The recommendations were issued by MCCCI president, James Chimwaza, during a pre-budget consultation meeting called by the Ministry of Finance
MCCCI proposes the removal of some general and specific domestic tax measures such as excise tax, value added tax (VAT) and withholding tax.
He said government should also consider providing incentives that will promote usage of alternative sources of energy amidst the current power deficit due to lack of sustainable sources of energy.
Chimwaza further suggested the review of excise duty on alcoholic beverages to curb beer smugglings saying the current system is counterproductive. He also recommended the abolition on withholding tax on farm produces to bring consistency and fairness on the market.
“When ADMARC is purchasing produce from local farmers they do not deduct withholding tax while when private businesses do so they pay. This puts private business at a disadvantage,” he said
The MCCCI president further proposed the downward review of the 20 percent withholding tax on gross sales to 10 percent for small and medium enterprises (SMEs). He also observed that the export allowance calculated at 25 percent of profits from exports was not attractive enough for exporters
“To make export allowances attractive for exporters, we propose a review of the current provision which is based on taxable profits according to Taxation Act to change to export proceeds,” he noted
In his comment, Minister of Finance Felix Mlusu acknowledged the issues raised saying that government will rectify some of the concerns.
Mlusu reminded participants that his ministry recently launched the Domestic Revenue Mobilisation Strategy, as a tool to ensure transparency around the administration of tax and non-tax policies.
The minister stressed government’s desire to continue fostering inclusiveness of the private sector in national development through the creation of a conducive business environment.
He pointed out that for the country to address its foreign exchange challenges, government has launched the Second National Export Strategy which encourages the private sector to industrialise as well as to generate foreign exchange earnings through exports.
Malawi offers a wide range of tax incentives with the aim of encouraging development, enhancing output, earning and saving foreign exchange and expanding employment opportunities.
These tax incentives are aimed at enabling businesses to grow and expand their operations thereby contributing to the overall social-economic development of the country.
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The establishment of a stable and self-sustaining ecosystem, but not necessarily the one that existed before mining began. In many cases, complete restoration may be impossible, but successful remediation, reclamation, and rehabilitation can result in the timely establishment of a functional ecosystem.
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The cleanup of the contaminated area to safe levels by removing or isolating contaminants. At mine sites, remediation often consists of isolating contaminated material in pre-existing tailings storage facilities, capping tailings and waste rock stockpiles with clean topsoil, and collecting and treating any contaminated mine water if necessary.
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