Malawi economic activist against ‘tax holidays’ to foreign investors

Malawi’s Civil Society Organizations (CSOs) that are promoting fair and better ways of using tax revenue will launch the Tax Justice Campaign on Friday, December 20, 2013 in Lilongwe.

The CSOs will launch the campaign through a forum called the Tax Justice Platform, which is aimed at advocating for tax reforms so that corporate institutions, mainly foreign companies are not over subsidized by the State and that high income earners pay proportionately more tax than low income earners to promote equity.

According to Dalitso Kubalasa, Executive Director of Malawi Economic Justice Network (MEJN), CSOs believe that if government adopts a taxation system that is progressive and equity oriented on the revenue side ad exercise responsive and progressive spending, poverty and inequalities can decline even with minimum support from cooperating partners.

Kubalasa: Tax justice
Kubalasa: Tax justice

“More, importantly, increased taxes from progressive taxation system can contribute towards reduced debt   and promote sustainable development,” he added.

Corporate tax in Malawi falls within the range in Southern Africa Development Community (Sadc) in which some countries have corporate tax of 25 percent and others have the same at 35 percent.

“However, there are many incentives particularly on corporations in extractive sector which have subjected the country to lose out from its natural resources. Owing to the fact that corporations make  more moneybut pay 30 percent tax and that employees make less yet pay 30 percent tax, more revenue will be realized for the country if corporate tax is increased,” observed Kubalasa.

The Task Justice Platform is there for calling for an end to incentives like tax holidays to potential investors as this is reducing the revenue for the country.

The tax justice campaign will also sought to influence reform in taxation system to tilt towards increasing revenue and its prudent spending and also raise public awareness on the value of foregone goods and services as a result of tax incentives.

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