Tax experts have described Malawi’s tax regime as unfair, saying instead of a broad tax base, the country has a deep tax base which is a burden to employees.
The experts expressed their sentiments on Friday in Lilongwe during a panel discussion on the sidelines of a taxation book launch by PricewaterhouseCoopers (PwC) associate director Moffat Ngalande.
Tax expert Elton Jangale, a partner at PFI Partnerships (Malawi), said the country does not have a properly written policy on taxation for expatriates and issues relating to transfer pricing.
He said: “There is need for the country to have policies that talk to each other. We have some policies, for example, the National Export Strategy and others that do not align well with the Taxation Act.”
Jangale, who is also a lawyer, said there has to be a specific tax for expatriates and proper criteria to define who qualifies as an expatriate to ensure that they pay the correct amount of taxes.
“For the country to move forward, we need expatriates. We are not technologically advanced enough so we will always need experts.
“For example, when Paladin Energy came into the country, nobody knew how to calculate the worth of a uranium cake,” he said.
In his remarks, Nedbank Malawi chief operating officer Ben Kananza said there are tax treaties that cost the country revenue; hence, the government burdens its citizens with punitive taxes.
“We have tax policies that maximise revenue while the revenue sources are drying up. This is not sustainable” he said.
Recently, there have been efforts to broaden the tax base to enhance domestic resource mobilisation.
In the 2017/18 fiscal year, Malawi Revenue Authority is projected to collect K918 billion to enable government provide goods and services. n