At a time businesses are struggling to stay afloat, city councils have adjusted upwards fees and service charges, according to a Malawi Government published gazette, squeezing firms even more.
The Malawi Confederation of Chambers of Commerce and Industry (MCCCI) has protested the fees adjustments, arguing they will negatively affect businesses operations.
In one glaring instance, Lilongwe City Council (LCC) has raised by 700 percent the application fee for heavy industries/factories from K250 000 to K2 million.
The fees adjustment from Lilongwe, Mzuzu and Blantyre are effective this fiscal year.
Most of the notable changes for LCC, apart from the manufacturing industries, concern light industries whose fee is now K1 million, casino operators will now be paying K750 000, international schools K750 000, tertiary institutions K1 million while telecommunication companies will be paying K3 million per annum in Lilongwe.
MCCCI president Carl Chokotho said looking at the economic condition and how businesses are recovering, city councils ought to have broadened and not deepen their revenue collection.
“City Councils ought to work with the private sector for mutual benefit. The rates will drive some small and medium enterprises [SMEs] into losses in the current economic environment and will definitely negatively affect industry in general.
“Further, in terms of Lilongwe, services are extremely poor if and where provided. We would be interested to know what this extra revenue is for. Refuse collections, security and traffic lights are some of the poorest services in the city even when compared to Blantyre,” he said.
However, in a written response to a questionnaire, LCC spokesperson Tamara Chafunya said the council’s benchmark has been a common trader in the market selling vegetables who is paying K100 per day, translating to K36 500 annually.
“Some of the businesses were not on the list; hence, were not paying. It was safe for us to make these adjustments to be in tandem with the current developments and businesses operating in our city.
“The fees are paid annually, and if one calculates to find the amount being paid per day and in comparison with one selling goods in the market, the council feels the fees are reasonable,” she said.
Mzuzu City Council spokesperson Karen Msiska said they effected the adjustments to match the cost of providing services in the city, which is growing at a rate of 4.4 percent annually.
“We have developed revenue enhancement strategic plan which stipulates a number of ways the council will use to maximise revenue collection. It has gone beyond the traditional revenue sources,” he said.
Blantyre City Council spokesperson Anthony Kasunda justified the raise, saying as the cost of delivering services has increased; hence, the need to revise the rates so that the quality of services are not compromised.
“For the council to deliver services, it needs resources and 90 percent of the resources to be generated locally,” he said. n