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ActionAid talks tough on regressive tax policies

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actionAid has called on government to implement progressive tax policies and use tax revenues to fund public services as a way of ending poverty and inequality in the country.

A press statement by ActionAid regarding United Nations Public Service Day has said public service financing in Malawi remains inadequate.

According to the organisation, abusive tax policies are denying government finances to redistribute power and wealth which is critical to the realisation of human rights.

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“Public service financing in Malawi remains inadequate. Regressive tax policies and abusive tax practices currently are allowing many wealthy elites and multinational corporations to get away with not paying their fair share of tax. This is denying government budgets, the key source of funding for public services and social protections [money for activities’ implementation],” reads the statement.

According to ActionAid, developing countries lose an estimated $213 billion a year to tax avoidance by multinational companies.

In an interview over the weekend on the sidelines of a press briefing organised by Activista, a youth organisation that lobbies for fair taxation, ActionAid Governance Officer Chisomo Manthalu said the absence of Mines and Minerals Bill makes it difficult to know how much a company has paid to Malawi.

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“We would love if the Mines and Minerals Bill was passed into law because it will contribute towards ensuring tax justice in Malawi. As of now, we cannot really know how much a certain company has paid in terms of tax,” he said.

On Friday, opposition Members of Parliament (MPs) hit at government for putting in place tax measures that do not have a significant impact on the lives of Malawians.

Minister of Finance Goodall Gondwe tabled the Taxation (Amendment) Bill, as one of the bills that will help in the implementation of the K1.323 trillion budget.

Among its provisions is that any person who refuses to pay tax will be compelled to pay a fine of K1 million.

The United Nations set aside the Public Service Day, which falls on June 23. The day was declared by the UN General Assembly to celebrate the value and virtue of public service to the community, highlighting the contribution of the public service in the development process.

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