Expectations high from mid budget

Post was last updated: March 8, 2019

By Taonga Sabola:

As Finance Minister Goodall Gondwe goes back to his employers, Malawians, to report how he has used billions of their hard earned taxes, the Institute of Chartered Accountants in Malawi (Icam) and the Economics Association of Malawi (Ecama) have said they have high expectations from the statement.

In an interview Thursday, Icam Chief Executive Officer, Francis Gondwe, said his institution would be interested in hearing from the local Chancellor of the Exchequer on how he intends to keep external debt under control, saying increased borrowing means the country is placing a burden on future generations.

Recent reports indicated that external debt had increased by 17.3 percent from previous year.

The Icam boss said his institution expects the government to expedite the review of the Public Financial Management Act.

“So many controlling officers have appeared before the Public Accounts Committee to explain the various issues which were raised in the Auditor General’s reports. Action must be taken on the officers who abused resources. That action should be backed up by the law,” Gondwe said.

The accountants’ body further said it expects the government to strengthen the Central Internal Audit (CIAU) to fulfil its mandate of providing checks and balances.

“The position of the Director of the Unit should be elevated to the level of a Principal Secretary. This will give him more powers to follow up on his recommendations which are not implemented by the controlling officers,” Gondwe said.

On taxes, the Icam chief said the institute expects the finance minister to put in place deliberate efforts to broaden the income tax base by engaging the informal business sector.

“This sector may not comply with laws and regulations and may not be audited. The sector should be engaged so that it understands its role in fostering economic development and the benefits of paying taxes.

“In general, the tax collecting body has done very well in introducing e-payment system. However, the payment channels should also include mobile money platforms such as Mpamba and Airtel Money,” Gondwe said.

He added that Icam expects Capital Hill to remove VAT on water consumption, saying it has left the poor very poor.

“The vat threshold should be increased from K10 million to K50 million as this will give an opportunity to SMES to grow and, further, it will allow the Malawi Revenue Authority (MRA) more time and resources to manage taxpayers with bigger income that will make value addition,” he said.

The Icam boss added that they expect the mid-term budget to address market distortions created when applicants from the same industry are treated differently when it comes to approval for issuance of licenses for industrial rebate.

“The government on one hand has been busy attracting investors so that foreign direct investment can improve but Ministry of Finance has not been active in negotiating tax treaties and this is a step backwards in attracting investors to Malawi,” he added.

On his part, Ecama Executive Director, Maleka Thula, said economists were interested in hearing about how the government has and will continue to implement the budget that has minimum and sustainable deficit given doubts over disbursements of some expected donor funds.

“Key emphasis should be placed on prioritisation of expenditures as more focus should be on development, which usually suffers downward revisions in case of poor revenue performance.

“We hope that future budgets will largely be reflective of the country’s domestic as well as global development plans to ensure sustainability of development,” Thula said.

A Blantyre-based school leaver, James Chikowi, said he expects Gondwe to explain how he has used the budget to create jobs for the youth.

“One crucial thing that has been neglected in recent years is job creation. Of late, emphasis has been on internships rather than job creation. I would like to hear from the minister as to how many jobs the government has created with the billions spent in the first half and how many they intend to create in the second half of the fiscal year,” Chikowi said.

Let us know what you think of this update and remember to add us on our facebook and follow us on our twitter. Make sure to come back daily for more Malawi business news updates.

Quick Links: Malawi Banking News | Malawi Technology News | Download Business eBooks | Ten Signs You Are An Entrepreneur | What is a Managing Director?

Today’s top business story: Top Commercial Banks In Malawi

Source link