Minister of Finance, Economic Planning and Development Goodall Gondwe has expressed disappointment with the Minibus Owners Association of Malawi (Moam) over failure to utilise the tax waiver government imposed on new and used motor vehicles not exceeding eight years.
Instead of utilising the current tax relief, Moam president Coaxley Kamange pleaded for yet another tax waiver on tyres.
Moam wants government to consider reducing tax on motor vehicle tyres as well as extending the tax waiver imposed on new and used motor vehicles not exceeding eight years to 10 years.
Speaking on Thursday in Blantyre at the Ministerial Pre-Budget Consultation meeting for the 2016/17 fiscal year, Kamange appealed to Gondwe to consider extending the duty waiver to enable indigenous Malawians to bring in more minibuses so that they can phase out the mini vans, such as Nissan Vanette and Mazda Bongo.
He said: “Our members have not benefited
[from the current tax waiver] as we only find mini vans such as the Mazda Bongo to fall in this category. These types of buses are not durable and also not suitable for passenger service.
“The minibus service is a big component of the transport and logistics sector in the country, carrying thousands of passengers on a daily basis.”
Kamange argued that to avoid an increase in road accidents caused by use of worn out or second hand tyres on minibuses, government must waive duty and surtax on new tyres.
But Gondwe, without mincing words, expressed his disappointment with Moam’s proposal, saying the association has messed up the original purpose that the tax waiver intended to achieve.
“I am very disappointed in Moam. It was you people who came to our offices to lobby for this tax waiver. We gave you a tax waiver on new vehicles, but you are letting other people use it.
“They [traders] are ordering these mini vans duty free in your name and you end up buying from them again, when they are old. You are not being honest with us because your own members are the ones who are doing this,” said a visibly charged Gondwe.
In a separate interview, Malawi Revenue Authority (MRA) deputy director of corporate services Steve Kapoloma said the authority is aware that some Moam members are abusing the tax waiver and is working on mechanisms to arrest the problem.