Industry asks government to settle arrears

Felix Mlusu

The Malawi Confederation of Chambers of Commerce and Industry (MCCCI) has urged the Treasury to consider settlement of tax refund to the private sector among priority areas in the 2021/22 National Budget.

This came out among key inputs from the industry players into the next budget as Finance Minister is soliciting views for consideration.

The fresh call comes as tax refund areas were reported to have surged from K10 billion in November 2020 to K12 billion now.


Industry players have been lamenting that this is among several constraints to economic growth.

MCCCI Advocacy and Business Development Manager, Madalitso Kazembe also called on the government to consider reviewing exercise duty calculation, saying the present system is counterproductive.

Kazembe said traders who import finished products pay excise duty on the cost while local manufacturers are charged based on the selling price.


She, further, said export allowances should be reviewed from the current provision which is based on taxable profits, according to Taxation Act, to export proceeds.

“We want a downward revision of excise duty from 30 percent to 20 percent under tariff heading 2206.00.01 to create more industry growth opportunities.

“Also, we want removal of duty on soap and noodles among others to level the playing field with our neighbouring countries,” Kazembe said.

Earlier, Finance Minister Felix Mlusu said the government had commenced payment of private sector arrears as one way of injecting liquidity into the economy.

During the week, Mlusu has been soliciting views from various stakeholders as part of the next budget’s formulation process.

One of the contributors, the Employers Consultative Association of Malawi (Ecam) suggested removal of Value Added Tax (VAT) on Pension Administration fees.

Ecam Executive Director George Khaki said currently pension arrears are in excess of K26 billion due to introduction of the tax in 2020.

“Removal of pension administration fees will lessen the cost of provision of pensions and make more employers meet their pension obligations which compliment government efforts in providing social protection programmes or Safety Nets for persons that are no longer able to work,” Khaki said.

He added that the budget should also include removal of VAT on the prices for basic commodities such as cooking oil, milk, maize, rice, flour and sugar so that many Malawians afford to buy these items.

In its input, the Institute of Chartered Accountants in Malawi (Icam) cautioned the government on rising public debt to finance the yawning K754 billion-budget deficit for the 2020/21financial plan.

Icam was bothering that much of the borrowed money is used on consumption not production.

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