Input from some stakeholders into the 2020/21 National Budget points to the need for the Treasury to consider several reforms of the tax system.
The stakeholders made fresh submission to the Treasury for consideration into the next financial plan following a call from new Minister of Finance, Felix Mlusu.
Just a month ago, the institutions gave their views to the then finance minister, Joseph Mwanamvekha, who did a similar exercise for a budget which was discarded days after its presentation to Parliament.
Institute for Chattered Accounts in Malawi (Icam) for instance re-submitted its 13-points proposal, among other things urging the government to devise ways of broadening the tax base.
Icam feels more revenue could be raised if authorities reached out to informal sectors with tax generation incentives.
“There are a lot of rental income activities that are not taxed due to negligence on the part of collection bodies and ignorance on Withholding Tax administration on the part of tenants.
“Tax collection from rentals would improve the fairness in our taxation system as more income earners will bear the burden,” reads part of the recommendations from Icam.
The institute also suggests that the government should re-introduce Audit committees in all its ministries, promote manufacturing and agriculture industries.
Malawi Confederation of Chambers of Commerce and Industry (MCCCI) suggest that making tax provisions favourable would be incentives to stimulate industry performance and economic growth.
“The cost of doing business is high in Malawi, with a relatively high tax burden and compliance costs in the region. The high tax burden makes local products less competitive in terms of prices against neighbouring countries and on the domestic front, this gives smuggled products a competitive advantage.
“Tax reforms should strive towards enhancing efficiency as well as supporting economic growth and not be an obstacle to doing business,” reads MCCCI’s proposal in part.
Ministry of Finance spokesperson, Williams Banda, has commended stakeholders for their input into the budget.
Recently, Mlusu presented a K722.4 billion provisional four-month budget to Parliament.
Justin Mkweu is a fast growing reporter who currently works with Times Group on the business desk.
He is however flexible as he also writes about current affairs and national issues.