The Malawi Confederation of Chambers of Commerce and Industry (MCCCI) has said it may create a pool account for taxes if the government does not improve on its economic governance and financial management.
The MCCCI argued that government considers foreign donors who contribute about 40 percent to the budget as being more important than the local business that contribute the remaining 60 percent.
Speaking in an interview after the MCCCI annual general meeting (AGM) that took place at Comesa Hall in Blantyre on Wednesday, the newly elected president Newton Kambala said the chamber has no intentions to antagonise with the government but if negotiations on governance will fail they will withhold taxes.
“We will engage the government in dialogue so that it understands that we are equally important. We will not push our concerns in form of a fight, but we will sit down with the government so that it appreciates the importance of managing the financial resources in a prudent manner. Only if government appreciates taxpayers then we will we move away from aid to trade,” said Kambala.
The MCCCI, which prides itself as the voice of the private sector, warned that if government does not understand the importance of taxes we will agree as a business community to stop remitting taxes that the sector accumulates.
Kambala explained that the MCCCI does not intend to stop paying taxes but will rather create a pool account for the dues.
In November last year, donors under the Common Approach to Budgetary Support (Cabs) announced the withholding of aid due to the Cashgate which has seen government departments struggling to meet its budget requirements.
Due to the suspension of the aid by the country’s major donors the 2014/15 Budget is being developed on the assumption of no direct support.
According to the Ministry of Finance 2014/15 expenditure and net lending is pegged at K693 billion out of which K181 billion (US$44 717 444.7) is development expenditure.
The planned 2014/15 budget is K52.7 billion (US$129 484 029) higher than the K640.3 billion (US$1 573 218 673) revised 2013/14 budget.
The chamber, however, fears that that may prompt an increase in taxes which the private sector is not ready to take.
In the wake of the Capital Hill scandal the MCCCI threatened that it would withhold taxes.
The chamber with other non government organisations also rebuked the government for first sending the Cashgate report to the International Monetary Fund (IMF) before it was made public to Malawians.
However, the government said the report was a special request from the IMF.