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Budget too ambitious—MCP, PP

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The opposition Malawi Congress Party (MCP) and People’s Party (PP) have doubted the possibility of achieving what they call ambitious plans in the 2017/2018 National Budget.

In his quick reaction to what the Minister of Finance, Economic Planning and Development Goodall Gondwe presented on Friday, MCP spokesperson on finance Alexander Kusamba Dzonzi described it as a budget that is aimed at squeezing Malawians further.

Dzonzi said what government has done is to ensure that domestic revenue increases and that can only be achieved if people pay more taxes.

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“People can only pay more taxes by denying themselves some other vital consumption items. That is the reason I am saying they are going to be squeezed harder,” Dzonzi said.

He said being taxed is not bad per se but the government is not coming out clearly on how it will safeguard the taxes in the wake of corruption that even the government itself admits to be the order of the day.

Dzonzi also said the figures on economic growth are supposed to be anchored on proper economic policies but Gondwe failed to say on what policies his assumptions for economic growth are based on.

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PP spokesperson on finance, Ralph Jooma, said what is not coming out clearly is the issue of linking economic growth to income per capita.

“You could hear the minister saying within 10 years we want income per capita to be doubled. And the only reason he gave is that we want our economic growth to be as ambitious as seven percent per annum. For us, from experience, we know that there could be economic growth without being inclusive. So, there could be economic growth that will only benefit few individuals. So income capita is one thing but I think we should be talking of equal distribution of resources,” Jooma said.

Gondwe said in order to satisfy Malawi’s economic aspirations to move out of the group of countries considered the poorest in the world, it is the government’s intention that per capita income be doubled in the next 10 years.

And to achieve that, according to Gondwe, there is need for an average economic growth of seven percent per annum.

Jooma, however, hailed the tax changes such as the increase in tax free threshold from K20,000 to K30,000 and the introduction of 35 percent tax bracket for those receiving salaries of K3 million and above.

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