The Institute of Chartered Accountants in Malawi (Icam) and the Malawi Confederation of Chambers of Commerce and Industry (MCCCI) have sounded an alarm over what they see as a dangerous tilt in fiscal planning— chasing revenue at the expense of investment growth.
In separate submissions to the Treasury during the recent pre-budget consultation meetings, the two bodies cautioned that while the Treasury was under pressure to widen the tax net and plug deficits, the current trajectory risked suffocating businesses that were already battered by inflation, forex shortages and policy unpredictability.
Icam President Daniel Jere told officials that Malawi’s narrow tax base had left formal employees carrying a disproportionate burden.
“We cannot continue punishing the same group of taxpayers while leaving the informal sector untouched. The government must raise the tax-free threshold to K250,000 and scrap the 40 percent top marginal rate. Icam also proposed a simplified sales tax system to replace VAT [Value Added Tax], because delayed refunds and high compliance costs have eroded trust in the tax regime,” Jere said.
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MCCCI Chief Executive Daisy Kambalame, who presented on behalf of the private sector, pressed for digitisation of revenue collection to curb leakages and corruption.
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She warned that punitive excise duties—such as the 95 percent levy on local fruit wines and the 110 percent rate on spirits—were driving smuggling and undermining emerging industries.
“The government must realise that over-taxation is not just a revenue issue; it is a competitiveness issue,” she said.
The business lobby also called for a private-sector-driven mining investment fund to stabilise revenues and build reserves, while urging removal of excise duties on products such as Maheu and domestic pipes to align with regional trade practices.
Both submissions converge on the point that Malawi cannot tax its way into prosperity.
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With gross domestic product (GDP) growth revised down to 2.7 percent in 2025 and more than half of businesses operating below 50 percent capacity, the private sector insists that investment incentives, not higher rates, will unlock growth.
The warning sets up a policy clash as the Treasury drafts the 2026-27 budget.
Officials have promised inclusivity and fiscal discipline but the private sector’s message is blunt—without predictable, fair and investment-friendly tax reforms, Malawi risks facing deepening stagnation and eroding investor confidence.
On Monday, the Ministry of Finance dismissed as false and misleading claims that the government planned to introduce worldwide taxation, pension income tax and death benefits tax.
