Malawi Confederation of Chambers of Commerce and Industry (MCCCI) and Institute of Chartered Accountants in Malawi (Icam) have asked Treasury to review some taxes and tax policies to improve revenue and ensure business survival and growth.
In their inputs to the 2022/23 National Budget, the two bodies want the Ministry of Finance to consider introducing advance pricing agreements in the Taxation Act for all other sectors, including mining, to remove uncertainties created by transfer pricing issues.
Icam vice-president Moffat Ngalande urged government to ensure that the budget stimulates the domestic economy.
“Government has a big challenge in creating an efficient tax system because we have an informal economy, which is cash-based that brings challenges in terms of how we can record transactions in the economy,” he said.
Ngalande said many companies that invest in Malawi have tax avoidance schemes as such government needs to put in place checks to curb tax avoidance.
“These include renegotiating double tax agreements with other countries and companies,” he said.
MCCCI president James Chimwaza said the current tax system taxes farmers before they have appreciated the cost they are incurring through withholding tax.
“We thus feel it is far much better to tax farmers at the end when all business has been concluded,” he said.
The chamber also want government to remove excise tax, value added tax and withholding tax on tariff on energy products to promote usage of alternative sources of energy and review excise duty calculation.
Minister of Finance Felix Mlusu said they will srcutinse the input given by various stakeholders.