Treasury deceived Malawians on carbon tax: Govt stammers over K1.2b levies

Funds amounting to K1.2 billion—a figure enough to support 30 constituencies at the present package of K40 million, in constituency development fund (CDF)—may as well have miraculously disappeared in government coffers as officials from the Ministry of Finance have failed to explain how they were spent.

Government, last year, introduced carbon tax levies which it collected through the Department of Road Traffic and Safety Services (DRTSS) before the revenue was made part of the fuel levy under the Malawi Energy Regulatory Authority (Mera).

But, it seems, the K1.2 billion collected, as of November 25 last year, has not seen the light of the day to benefit Malawians.

A probe by the parliamentary cluster committee on Agriculture and Natural Resources on Tuesday has revealed that Treasury has done injustice to Malawians for not being straight-forward with public resources.

The committee’s chaiperson, who was also natural resources minister in the Democratic Progressive Party (DPP) government, Werani Chilenga, said apart from the Treasury’s failure to account for the money collected, it also deceived Malawians on the reasons why the levies were introduced.

According to Chilenga, the initiative was not introduced to collect revenue for climate change interventions but, rather, its objective was “to boost the revenue collection under a wider tax base.”

“Treasury should apologise for deceiving Malawians as no single tambala has been allocated for mitigating climate change effects,” said Chilenga.

Budget director in the Ministry of Finance, Peterson Pondera, while admitting the collection of funds, and saying some of them were released into the coffers of the Ministry of Natural Resources, could not disclose where the rest of the money went to.

Said Pondera: “The carbon tax funds were deposited into the government account number one because the Ministry of Forestry and Natural Resources had not yet developed guidelines on the use of the resources.

“The ministry was supposed to to develop guidelines on the operationalisation of the fund. And we cannot reinvest resources now because they were already used for other purposes. But we will do that with what we collect this year.”

According to the budget director, K3 billion is projected to be collected in the current 2020/21 fiscal year.

Carbon tax was introduced in Malawi’s 2019/20 budget and is levied annually. It varies from K4 000 to K15 500, depending on the size of the car’s engine.