The Malawi Confederation of Chambers of Commerce and Industry (MCCCI) has faulted Finance Minister Goodall Gondwe over his decision to stop giving tax incentives to companies.
MCCCI Chief Executive Officer, Chancellor Kaferapanjira, was reacting to pronouncements made by Gondwe when he presented the 2018/19 national budget.
Among others things, Gondwe said the government intends to reverse tax incentives that it had given to spur investments in the country.
He said customs procedure codes will be amended to include a provision requiring full payment of taxes from change of the intended purpose that made the project qualify for the tax concession.
“Overtime, government has been putting in place targeted tax exemptions to manufacturers but these concessions have not trickled down to the local masses through reduced prices.
“In this regard, government will review the tax concessions that were granted to these companies and will reverse the earlier decision to grant them the concessions,” Gondwe said.
He added that some companies that have not been remitting taxes to the Malawi Revenue Authority (MRA), and that the taxes have grown in excess of K400 billion.
Reacting to the development, Kaferapanjira said the move is an indication that the government does not consider the business sector.
“The minister, and whoever he represents does not care about what happens to business. They only care about other sectors of the economy because, when you are given exemptions for a specific period, the idea is that you should reduce your production costs.
“In fact, the minister is creating uncertainty. Some businesses make investments because the cost of investing has been reduced. If the incentives were not there, they would not have invested in the first place and they (government) provide this because the cost of setting up a business is very high. Now you cannot change a decision midway and that’s what government has done,” Kaferapanjira said.
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