The Malawi Revenue Authority (MRA) has said most small and medium enterprises (SMEs) are not benefitting from tax incentives put in place by the government.
Briefing reporters in Lilongwe on the sidelines of the Fiscal Incentives for Entrepreneurship Workshop organised by the National Planning Commission, MRA Deputy Commissioner for Technical in Domestic Taxes Division Grey Balawe said there are many tax incentives for businesses in the country aimed at helping enterprises grow.
According to Balawe, most SMEs are not aware that they have the right to claim tax incentives because they have not formalised their tax status
“They have to formalise their tax status for them to enjoy the incentives. They kind of shy away and by shying away from formalising their tax status, they end up not enjoying it,” Balawe said.
MRA Head of Corporate Affairs Steven Kapoloma said tax incentives are not for selected businesses.
He said for businesses to enjoy the incentives, they just have to follow the right procedures.
At the workshop, the Malawi Bureau of Standards also presented procedures SMEs need to follow to have their products certified.
National Planning Commission Director General Thomas Munthali said the current triple challenges of forex shortages, fiscal deficit and unsustainable debt are a result of there not being enough levels of entrepreneurship to generate the forex and taxes with which the government can retire its debt and support social services sustainably.
Munthali said without a vibrant and meaningful entrepreneurship base– entrepreneurship that can generate forex or save Malawi forex and not just dealing with merchandise wholesaling and retailing that drain us the forex— the country will continue having government relying on begging and debts.
“[The] government will partner entrepreneurs as part of de-risking the investments and confidence-building and eventually dispose of the shares to Malawians,” Munthali said.
He said one important area for entrepreneurship is mega farms and maximising productivity on small pieces of land.
Ministry of Finance Revenue Division Deputy Director Gracian Kandiwo said the government has put in place tax incentives aimed at supporting the growth of business in all sectors of the economy.