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Minister warns parastatals

By Samuel Kalimira:

Finance Minister Joseph Mwanamvekha has directed government institutions, including parastatals, to start paying taxes.

Speaking during the 2019/20 pre-budget consultation meeting held in Mzuzu Wednesday, Mwanamvekha warned that the government would, using Public Finance Management Act (PFM), deal with institutions that fail to comply.

Mwanamvekha said his ministry has records of parastatals that are not producing management accounts and audited accounts, a practice which is against principles of the Act.

He said he was aware that some parastatals make losses every year due to their chief executive officers’ poor performance.

“We would want to see that chief executive officers are performing. We want to make sure that they are able to pay their taxes because we need those taxes. They are collecting Value Added Tax (Vat) from their clients and they must pay back,” Mwanamvekha said.

He said his ministry issued formal directives to the underperforming parastatals, reminding them to be producing accounts, providing dividend and stop abuse use of resources.

“We, sometimes, wonder why some institutions are underperforming but their managements are travelling all the time; all that we have to deal with. The PFM Act is clear in terms of sanctions that have to be imposed on those that are not complying with procurement and any other financial issues,” Mwanamvekha said.

But Mwanamvekha refused to disclose the identities of the underperforming institutions, arguing that he did not want to embarrass them.

However, Mwanamvekha singled out six water boards of Northern, Central and Southern regions, Blantyre and Lilongwe, for allegedly failing to pay their tax because the government has huge debts accumulated through unpaid bills.

But Moses Mkandawire of Church and Society of Livingstonia Synod of Church of Central Africa Presbyterian, in his presentation, accused the government and other politicians of suffocating the parastatals.

“Some individuals are appointed and others recruited in such institutions based on their affiliation to certain political parties. We have also seen a situation where politicians stifle operations of statutory bodies. There is also political interference which, if stopped, such institutions can perform well,” Mkandawire said.

Others who contributed during the budget consultation were Mzuzu University Vice- Chancellor John Saka, who asked the government to improve education standards in the country.

A similar meeting took place in Lilongwe and will also take place in Blantyre today.

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