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Government ponders on widening tax net

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The government is considering introducing taxes for landlords, among others, in a quest to widen the tax base and enhance revenue mobilisation.

This was revealed last week at the Economics Association of Malawi (Ecama) annual conference in Mangochi during a panel discussion after a presentation on Strengthening Fiscal Policy for Development by Elias Ngalande,

Secretary to Treasury Macdonald Mafuta Mwale said not everything has been taxed and the government was eying landlords, among other targets.

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“The fiscal space can be created when people pay for services. Most services are free; when the government puts a tollgate we camp there to close it. The citizenry and private sector have a part to play and desist from pointing fingers,” Mwale said.

Another panellist who is also Director of Policy and Economic Research at the Reserve Bank of Malawi Kisu Simwaka concurred with Mwale on the need to broaden the tax base.

“There is a narrow tax base but rising demand for services; it is a dilemma. Let us push more resources into development. We cannot continue spending on wages, interest and pension. It is simply wrong,” Simwaka said.

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Commenting on the development Knight Frank Managing Director Martin Chimangeni said the government should come clear on the suggestions.

He was quick to point out that commercial landlords are subjected to Withholding tax, Income tax and Value Added Tax which was already piling pressure on players.

“Housing is more of a social service and the government has to ensure it is affordable. So if they find houses unaffordable we will have more squatters,” Chimangeni said.

Senior Consultant at EK Tax Consultants Emmanuel Kaluluma said there is already a law in place but the move by the government would entail widening the net to maximise revenue collection.

He said the problem has always been enforcement on the part of MRA.

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