Financially vulnerable members demand Attorney General to suspend enforcement of some sections of VAT (Amendment) Act

Acting on behalf of “financially vulnerable members” of the Malawi public, Human Rights Defenders Coalition (HRDC) has engaged legal firm, Kawelo Lawyers to demand Attorney General to suspend enforcement of some sections of VAT (Amendment) Act.

In a legal notice, Kawelo Lawyers says HRDC was approached by the financially vulnerable members who include women doing small businesses; the elderly who receive remittances from their children and grand children working outside of the country.

Founder Managing Partner, Wesley Mwafulirwa

It also includes people living with disabilities, peasant farmers and other members of the community ejusdem generis.

“Our clients instruct us that parts of the amendments to the Value Added Tax Act will affect the actualization of their rights to economic activity, equality and dignity,” says the legal petition.

“The amendments will grossly affect matters of financial inclusion — especially bearing in mind the financial dynamics in the times of CoVID-19.”

The instructions Kawelo Lawyers are to particularly highlight to the office of the Attorney General are that the amended law has added VAT on interchange fees between banks — which are mostly done through ATMs.

“There are places in the country with only single service providers and inter-banking has helped the rural masses with banking services. This helps with inclusion of poor masses in the financial industry,” contends the petition.

A second highlight is that the amended law seeks to add VAT on interchange fees between a bank and other financial institutions including mobile banking.

“As you may be aware these transactions have greatly helped with financial inclusion of the vulnerable groups of our communities especially in times of CoVID-19. Mobile banking is mostly used by members of the community with no bank accounts.”

“Our clients’ opinion is that all the above amendments to the law will greatly and adversely impact their rights to equality, to economic activity and dignity.

“The amendments have the potential to further widen the gap between the rich and financially marginalised members of our community. In the process, their rights to an inclusive formal financial sector will be greatly impeded by the proposed amendment to the law.”

Kawelo Lawyers says the instructions received from its client is to demand that the “amendments should not be enforced” and that the Attorney General “should start facilitating the process of reviewing the impugned sections of the amended law”.

“Kindly be advised that if the above demands are not met and the law comes into force, our instructions are to proceed with Constitutional review of the impugned amendments.

“Be further advised that this letter may be used to claim party and party costs against your office,” says legal counsel, Wesley Chalo Kawelo Mwafulirwa.

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Kusen Gondwe
Kusen Gondwe
27 days ago

This is welcome idea, I support it. If fails we will be on the street for demos. This is day Robbery. Government should find another means of sourcing money. People are already burden with lots of taxes.

Kissinger Chiunjira
Kissinger Chiunjira
27 days ago

Malawians are Malawi’s worst enemy to progress. Are you sure it’s ok for banks to bag all their earnings from fees without any attribution whatsoever?
On the other hand why is RBM lying idle as nonbanking services proliferate in our banks overcrowding our banking services. Is it that the RBM is in collusion with bankers or perhaps their obligation is towards banks and not to Malawians?

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