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Income inequality continues to widen

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Income and wealth inequality has worsened in the country in the recent past with the richest 10 percent of Malawians spending 34 times more than the poorest 10 percent.

This is according to a recent report by an international non-governmental organisation, Oxfam.

In its Country Policy Brief on Commitment to Reducing Inequality (CRI) Index in 2020, Oxfam, however, says Malawi is doing well in its commitment to reduce inequality.

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It then calls for states that the country should intensify efforts towards addressing the challenge by channelling extra resources.

According to the index, Malawi ranks 44 out of 158 countries on education spending, 126 in Universal Health Coverage, and spends 6.4 percent on social protection which is low across the Sadc lower-income countries.

It further says that on the tax pillar, Malawi ranks 54 out of 153 countries mostly because it does well on collecting tax but taxation mostly milks the poor than the rich and the country ranks 85 in tackling wage inequality.

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“Review and reduce large tax exemptions and deductions to corporations and individuals, introducing more balanced bilateral tax treaties, as current treaties limit Malawi’s ability to tax foreign companies and introducing an inheritance tax; introducing a net wealth tax; and increasing land rates for the highest value land,” reads part of the report.

Meanwhile, the Centre for Social Concern (CfSC) says more needs to be done in the country to narrow the gap between the rich and the poor.

CfSC Program Officer for Economic Governance, Benard Mphepo says government should put a deliberate policy that should help people in the informal sector to have pension services which is currently lacking.

Mphepo added that agriculture being the backbone of the economy, there should also be deliberate measures that will make sure that farmers benefit from agriculture rather than middle men or the end use of crops.

“Generally, the one that benefits from agriculture are the traders or companies who do the processing. For example, with soya, the farmers do not benefit and the one who benefits is the one who process it to oil,” Mphepo explained.

Dean of Commerce at Polytechnic, Betchani Tcheleni, said the country needs to encourage formal employment and push for a further increase in minimum wage.

“It is the very poor who are milked through taxes and they are the same who are helping the very rich to get richer because they cannot negotiate for holidays but the very rich are given tax incentives,” he added.

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