The real impact from Malawi’s zero-deficit budget have now completely reared its ugly face as taxes meant to generate more local revenue have hit hard the private sector with major retailers scaling down operations.
Press Corporation Limited (PCL) have reduced its workforce under subsidiary PTC and Peoples in rural areas while sources have said Shoprite and Game Stores are seriously considering closing shop.
The group’s management has deemed it fit that it cuts down on operating costs especially in places away from cities as a strategy to counter to minimum tax introduced in the zero-deficit budget.
Joseph Njobvuyalema of the Malawi Congress Party (MCP) has called on government to dump the zero-deficit budget as it has proved costly to consumers with more pressure on businesses.
Media reports show that Society of Accountants in Malawi (Socam) has been continuously advising government to remove minimum taxes emphasising the negative impact on the consumer and retail businesses as they operate on very lean margins.
In its calculations, Socam said retailers operate on low margins and are expected to pay over 70 percent of their net profit in taxes which does not make sense to continue operating.
As it is, some employees under PTC/Peoples shops are being re-allocated with many fearing for their jobs which in the end will increase the number of the unemployed.Follow and Subscribe Nyasa TV :