A mid revelations that about 8.4 million Malawians face serious food shortage due to poor crop weather conditions, Malawi Revenue Authority (MRA) has introduced import value added tax (VAT) on some basic necessities.
MRA has, among other things, introduced a 16.5 percent import VAT on laundry soap, milk, bread and other bakers’ wares.
According to social protection monitoring body, Centre for Social Concern (CfSC), this will burden the poor who will now be denied access to some of these necessities.
CfSC director Jose Kuppens observed that putting import VAT on basic food and non-food items was going against the norms leaders vow to guard in improving welfare of the less privileged.
“We have always said doing that means taxing the very poor people. You do not place restrictive taxes on basic necessities. That is restraining them access to such things,” explained Kuppens.
He said government should have spared the poor by putting tax on luxurious goods such as alcoholic drinks and soft drinks.
But on his part, a tax analyst Emmanuel Kaluluma said ordinarily, when government introduces such measures there are reasons for doing so.
“In my analysis, government is mostly introducing import VAT.
“So, if we give them the benefit of the doubt, it could be a deliberate fashion to help our infant manufacturing industry to grow, thereby promoting the Buy Malawian Campaign,” he said.
Kaluluma said if the local industry could improve quality, it would be a step forward for the country. n