Safeguard economy From covid-19—ICAM
The Institute of Chartered Accountants in Malawi (Icam) has asked Treasury to focus on safeguarding the economy from the devastating effects of the Covid-19 pandemic if the country is to register positive recovery.
In its pre-budget proposals for the 2021/22 National Budget, Icam also suggests the review of some value-added tax (VAT) administrative penalties and turn Affordable Inputs Programme (AIP) into a Farm Input Revolving Loan to be disbursed and collected through village farmer clubs.
In his presentation yesterday in Lilongwe, Icam vice-president Moffat Ngalande urged government to ensure that the budget should aim to minimise the Covid-19 effects on businesses and ensure that public services continue to run.
He said: “The economy should be shored up against the impact of Covid-19 and in view of the effects of the pandemic, the expenditure should be prioritised and the resources available should be accounted for in a transparent manner.”
Ngalande observed that the VAT Act allows a taxpayer to claim input VAT for the past 12 months and yet the same Act allows Malawi Revenue Authority (MRA) to undertake an audit going back for six years which needs to be addressed.
He said the government also needs to speed up the tax integration system so that small and medium enterprises should start paying taxes to boost the tax base and promote manufacturing and agriculture industries by giving incentives such as withholding tax exemptions for start-ups in these industries.
On some administrative matters, the Icam also wants government to extend the voluntary tax window up to December 31 2021, arguing that businesses have not fully recovered from the adverse impact of Covid-19.
“The first and second waves of the Covid-19 pandemic impacted heavily on businesses and there are fears for a third wave which could necessitate another struggle for the foreseeable period. We thus would like the government to address this issue and also keep some tax liabilities in check such as pay as you earn as companies may be forced to retrench staff to remain afloat,” he said.
Minister of Finance Felix Mlusu said they have taken note of the proposals and will take on board some of them.
“Some of the things presented by the Icam are the things we are actually looking into as a ministry. This, therefore, gives us confidence that we are on the right path,” he said.
On his part, MRA commissioner general John Bizwick said the tax agency has taken note of the proposals and will reflect on them.
He admitted that compliance is key in revenue collections, saying MRA is advancing on its online automation platform to enhance tax compliance.
Pre-budget consultation started on April 9 and will run up to April 30.
