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Mixed views on ICT taxes

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Stakeholders in the ICT sector and other observers have expressed mixed views on the impact of taxes on ICT penetration in Malawi.

The Institute of Chartered Accountants in Malawi (Icam)— an umbrella body of accountants in the county—and ICT Association of Malawi (Ictam) believe that the taxes are a burden but the Treasury believes otherwise.

During the last pre-budget consultation meeting in Blantyre on Wednesday last week, Icam Vice President Moffat Ngalande said some taxes on ICT gadgets affected chances of the sector’s growth as they were expensive.

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Ngalande asked the government to put some waivers on ICT gadgets to make them cheaper and encourage penetration.

In response, however, Ministry of Finance Budget Director Loyce Chirinsungwi quashed the notion that taxes were hindering ICT penetration in Malawi.

She said although ICT is one of the enablers in the country’s industrialisation, the country needed to look at capital intensiveness of the sector, the coverage in the country and the price build up.

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“Taxation is applied on the base and not on items but we will see how we can make internet affordable rather than just blaming everything on taxes. And, if you compare Malawi with other countries where ICT is cheaper, their economies are bigger than ours,” she said.

Ictam President Bram Fudzulani said in an interview that the Treasury’s position was disappointing considering that the Malawi Digital Economy Strategy mentioned taxes as a hindrance to ICT penetration.

He added that this mean that the country had a long way to go in having cheaper ICT services and products.

“This is an insult. We want them to tell us which is which because, on one hand, they show commitment but, on the other hand, they say taxes are not to blame. Therefore, we need a clear take from government,” he said.

Research has shown that Malawi is among countries with expensive ICT services such as internet.

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