The remarks come in the wake of the newly announced budget by the Minister of Finance and Economic Development Goodall Gondwe that tax will constitute 80.3% of the revenue for the budget. Kaliya observed that the donors who have been financing about 40% of the country’s national budget get the money from taxes in their countries.
Kaliya said in Malawi there are a lot of people who do not want to pay tax but want government to do things for them or their community, a situation she described as worrisome.
“I personally have been arguing to say maybe half of the people that are doing economic activities are not paying tax, which is wrong. As citizens we need to be responsible ad make sure that we have an obligation to pay tax to the state so that the state is able to operate properly. For instance I can tell you that sometimes I feel like I pay tax for twenty thousand people, it shouldn’t be like that” lamented Kaliya.
The gender activist said it’s normal for a government to collect tax because even the donor money that comes here are taxes. “The many donors that give us money tax, for example the Norwegians pay tax for us to be given the money that we are looking for” said Kaliya.
In the K1.2 trillion 2016 /2017 national budget Gondwe also announced new tax measures among them reforms in the administration of taxes to broaden the tax base. The minister said since late 1960’s life insurance in Malawi has enjoyed a taxi rate of 21% which is lower than the standard.
“It is now time to unify cooperate tax of life insurance investment with those from other countries by increasing rate from 21% to 30%” indicated the Minister.
The Minister of Finance believes if people change their mind set the country can generate funding and help to develop the country as donors have stopped funding the recurrent budget. A few business people that this reporter talked to at Lilongwe flea market indicated that they make more than K200,000 a month but cannot pay tax. Mrs Mhango , a second hand seller in the flea market said paying tax is for those in formal jobs.
“I cannot go to Malawi Revenue Authority (MRA)to pay tax, there are even no mechanisms to collect tax from us here in the market, it only shows you that we are not eligible for tax.” said Mrs Mhango.
Reports of people, companies or organization invading tax in the country are common this may be a result of misunderstanding or lack of knowledge on the issue of tax. There is need for sensitization on the matter for the country to maximize its development using funds available in the country.
