Malawi Revenue Authority justifies 16.5% ‘tax on life’

The Malawi Revenue Authority (MRA) has justified the Value Added Tax (VAT) accrued to water saying without it consumers would be paying hefty bills for the utility to foot the suppliers’ production expenses.

The Authority disclosed this at a national interface with Civil Society Organizations (CSOs) in Lilongwe aimed at sensitizing the CSOs to enhance the ‘Everyone Must Pay Tax’ campaign.

The concern was raised by Livingstonia Synod’s Church and Society Executive Director, Moses Mkandawire, who sought clarification from the Authority as to why water, always referred to as life, should be taxed.

Another rights activist, Charles Kajoloweka, echoed Mkandawire’s concern wondering as to whether it was justifiable to “tax life”.

But in her response, MRA Deputy Commissioner General, Roza Mbilizi, said the tax set on water by the revenue collecting body was, in fact, a relief to consumers saying left to the utility suppliers the tax would be too exorbitant for consumers to pay.

“If water boards were to attach VAT to water depending on all the expenses incurred to produce safe water for drinking, taking into account all the chemicals applied, procurement of the equipment and maintenance of the same, consumers would not be able to pay for the utility,” she explained.

Mbilizi added: “In fact consumers ought to be happy they are paying the MRA set 16.5 percent VAT because without the intervention the water boards would be lumping all the expenses on the consumers.”

However, the explanation did not satisfy Mkandawire who later said in an interview that “there is need to do something because it still does not make sense to have water taxed – whatever the explanation”.

“I’m still not convinced with the explanation because water is life and to have it taxed is depriving people of life – it’s as simple as that,” said Mkandawire, adding that the civil society would push the matter further.