Govt fears to collect K172bn from Kabaza import tax because kabaza owners threatened ‘we will not vote for you’

It should shock you that government, despite being tough on other imports, is failing to collect about K172 billion from kabaza operators as they threaten politicians with votes, Secretary to the Treasury Betchani Tchereni has claimed.

No tax on Kabaza

He was speaking in Lilongwe Wednesday at the start of a National Debt Conference organised by the Malawi Economic Justice Network (Mejn) with funding from African Forum and Network on Debt and Development.

Tchereni’s sentiments come at a time Malawi’s public debt is hovering around K13.1 trillion.

He observed that public debt has been on the rise because Capital Hill is not raising enough revenue to meet the country’s ever growing needs.

“We are mounting unnecessary pressure on unnecessary things and we are spending much of our writing space, much of our media space, on things that don’t matter.

“What really matters is doing more to raise more revenue—because government has been cutting the budget, cutting expenditures, to the bone. Now we are being asked to cut into the marrow. This is no longer time for cutting. This is time to talk about revenue. Discuss revenue maximisation [and] then you won’t be discussing issues of debt,” he said.

He observed that when government attempted to introduce specific taxes on the importation of second-hand motor vehicles, people went and camped at Capital Hill.

“When we said ‘motorbike [owners], you need to pay and we peg that to any percentage’—we just said ‘you are going to pay K250,000 per year, then you should be registered’— they threatened politicians [saying] that ‘we will not vote for you’ because these are the people who are on the frontline when it comes to the campaign period.

“And there are no votes. And because there will be no votes, politicians backed down. I did the maths, kha! Kha! Kha! How much can I raise from here. K172 billion; that’s how much money I can raise from the motorbikes.

“K172 billion. Do you know how much I, as Secretary to the Treasury, can do with that money? Now you put that money into United States dollars. How much is that? But then I am being made to write on Facebook that ‘$20 million bagged’. That’s less than K40 billion.

“I want to be celebrating that when I can raise K172 billion within Malawi but they—civil society—do not want to talk about that. The civil society wants to talk about ‘cut expenditure, cut expenditure, cut expenditure’,” Tchereni said.

On his part, First Deputy Speaker of Parliament Madalitso Kazombo faulted the tendency by finance ministers to rush money bills in Parliament without proper scrutiny by lawmakers.

According to Kazombo, Parliament has relevant standing orders which require 28 days to scrutinise such bills.

“However, finance ministers have, on a number of occasions, asked for a waiver of such relevant standing orders, a development which hinders proper scrutiny of bills,” Kazombo said.

He said it is the wish of Parliament that Malawi passes money bills that promote production.

Mejn Vice Board Chairperson Reverend Innocent Chikopa weighed in on the issue, saying worsening poverty levels amidst huge borrowing implies that Malawi is not reaping from debt.

According to Chikopa, the Ministry of Finance rarely shares information on the debt situation and its impact on service delivery, with data disaggregated by gender for general public appreciation.

“Not all parliamentary bills on debt are shared with members of Parliament 28 days before deliberation on the floor to comply with Standing Orders of Parliament 120-134.

“Some parliamentarians are still playing the ‘game of numbers’ to authorise debts without regard to proper scrutiny to protect the public interest. Some of the loans acquired do not even match the capacity of Malawi’s debt repayment system and do not clearly demonstrate capability to promote economic growth and wealth creation,” Chikopa said.

The conference, which is being held under the theme ‘The Nexus of Debt and Gender’, continues in Lilongwe today.

It is serving as the building block leading up to the annual flagship African Conference on Debt and Development to be held in Maputo, Mozambique, from August 28 to 30 this year.





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