Captains of the industry, through their mouthpiece the Malawi Confederation of Chambers of Commerce and Industry (MCCCI), have asked the government to introduce tax incentives for firms to create more jobs in Malawi.
MCCCI made the observation in its submission to Finance Minister Simplex Chithyola Banda during the pre-budget consultations meeting.
“The government should reconsider tax incentives for companies that employ a large number of employees.
“This will incentivise companies to employ more people and the discount can be recovered by the government through Pay As You Earn for the extra workers,” reads part of the presentation delivered by MCCCI Director of Business Development Madalitso Kazembe.
The prayer by MCCCI comes at a time when the latest Malawi Country Economic Memorandum by the World Bank has shown that only one in every 10 Malawians over the age of 15 has a wage or salary-paying job.
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The memorandum notes that women, especially, struggle to find decent jobs, in part due to their relative under- enrolment in secondary and tertiary education, with most ending up at less productive, informal Macro Small and Medium Enterprises.
According to the bank, the private sector is central to addressing Malawi’s urgent jobs challenge.
It notes that with the population increasing at about 2.5 percent per year, the economy is not growing fast enough to provide decent jobs for over 400,000 young Malawians entering the labour market annually.
To jumpstart the manufacturing sector, MCCCI has asked Chithyola Banda to come up with a Special Purpose Vehicle or Industrial Development Fund in the 2024/25 budget to provide patient capital specifically targeting investments in the manufacturing sector.
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“Government should provide tax incentives to manufacturing and processing industries that use a substantial portion of local inputs in their production for them to have a comparative advantage as well as save forex.
“The priority industry qualification should be extended to existing taxpayers beyond those registered on July 1, 2013, with safeguards to prevent abuse. The current status prohibits other existing potential investors who registered their businesses before the regulation was introduced,” MCCCI said.
Speaking during the consultations, Chithyola Banda said the 2024-25 budget will focus on recovering the local economy.
