Malawi Chambers of Commerce and Industry (MCCI) chief executive officer Chancellor Kaferapanjira has described 2018/19 financial blueprint which has been pegged at K1.5 trillion as a financial plan that will not translate into any gains for poor Malawians.
In an interview, Kaferapanjira said the budget is the emptiest finance minister Goodall Gondwe has ever presented in his career as the nation’s purse keeper.
“The budget has nothing on electricity, this is a great joke,” he said.
Kaferapanjira accused the government of disregarding the private sector because of its failure to have a budget on the power improvement, saying it is less inspiring for the growth of the private sector which is key for economic growth.
“We have been complaining about electricity and there was literally nothing said about what government is going to do about electricity. You will recall that the minister said what government is working on will only come into reality in 2021. Who will wait up to 2021 when we know that businesses are shrinking due to lack of electricity and there is no immediate attention to this?” wondered Kaferapanjira.
He also faulted Gondwe over his decision to stop giving tax incentives to companies.
Among others things, Gondwe said the government intends to reverse tax incentives that it had given to spur investments in the country.
He said customs procedure codes will be amended to include a provision requiring full payment of taxes from change of the intended purpose that made the project qualify for the tax concession.
“Overtime, government has been putting in place targeted tax exemptions to manufacturers but these concessions have not trickled down to the local masses through reduced prices.
“In this regard, government will review the tax concessions that were granted to these companies and will reverse the earlier decision to grant them the concessions,” Gondwe said.
He added that some companies that have not been remitting taxes to the Malawi Revenue Authority (MRA), and that the taxes have grown in excess of K400 billion.
Reacting to the development, Kaferapanjira said the move is an indication that the government does not consider the business sector.
“The minister, and whoever he represents does not care about what happens to business. They only care about other sectors of the economy because, when you are given exemptions for a specific period, the idea is that you should reduce your production costs.
“In fact, the minister is creating uncertainty. Some businesses make investments because the cost of investing has been reduced. If the incentives were not there, they would not have invested in the first place and they (government) provide this because the cost of setting up a business is very high. Now you cannot change a decision midway and that’s what government has done,” Kaferapanjira said.
Budget and Finance Committee of Parliament chairperson Rhino Chiphiko bemoaned the fact that government has allocated funds to institutions and activities that don’t generate growth or development to the country.
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