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Blame game over K155bn govt owes private sector

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Government has attributed the delay to pay off the K155 billion it owes the private sector to tax arrears some companies had with Malawi Revenue Authority (MRA).

Ministry of Finance spokesperson Nations Msowoya said the companies had to first clear their tax liabilities with the national tax collector before government could start offsetting the loan.

“For those arrears that had correct paper work, it has not been very difficult to prepare the promissory notes, however there are some creditors who had tax liabilities with government and in addition their papers were not complete obviously these take time to prepare because tax liabilities have to be settled,” said Msowoya

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Msowoya’s remarks come as a response to concerns the private sector raised through the Malawi Confederation of Chambers of Commerce and Industry (MCCCI) that the repayment process has generally been slower than anticipated.

But Msowoya’s sentiments have annoyed MCCCI’s Chief Executive Officer Chancellor Kaferapanjira who questioned the Ministry of Finance’s role in tax collection.

“What government is claiming is not true. We all know that inflation is high right now and government knows that what once it starts paying these arrears, inflation soar. Why should government interfere in how companies are paying their taxes to MRA instead of just giving them what is due?”

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queried Kaferapanjira Kaferapanjira claimed that he had information that some people advised government to temporarily halt the process for fear of escalating inflation. Kaferapanjira described the situation as unfortunate to the companies owed.

Minister of Finance Goodall Gondwe said in parliament when presenting the 2015/2016 national budget that the K157 billion debt will be offloaded in three consecutive financial years through issuance of zero coupon promissory notes for companies to use to access money from commercial banks.

But MCCCI President Newton Kambala described the arrangement as a joke and violation of the principle of partnership which he said completely denigrates the weaker partner, in this case, the private sector.

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