Malawi’s Tax Regime Unattractive - MCCCI
The Malawi Confederation of Chambers of Commerce and Industry (MCCCI) says the country’s tax regime is unattractive and fail to attract and retain serious investors due to poor coordination.
Private sector captains in the country says taxes imposed in various sectors of the country like in mining, energy and agriculture just to mention a few are overburdening investors.
The analysis of the Malawi tax regime and its implications on the Investment Climate report, whose findings were disseminated Tuesday in Lilongwe, also reveals that some specific fiscal and investment incentives are poorly coordinated and designed and overlap each other.
MCCCI Chief Executive Officer Chancellor Kaferapanjira said his organization is recommending that government should provide tax incentives with clear laid out eligibility criteria, and facilitate access to finance in the country.
Kaferapanjira however says Malawi presents an opportunity for investment in the energy sector, particularly in renewables.
He said the country offers relatively competitive tariff structure and incentives, combined with its commitment to renewable energy, make it an attractive market for IPPs looking to invest in Sub-Saharan Africa.
“There are several areas that the report highlights that require attention of various stakeholders. There are disparities in our tax regimes that sometimes make our country unattractive. These areas have been highlighted in the report and need to be ironed out. Stakeholders here will look into this report,” said Kaferapanjira
Commenting on the report, Director of Finance at Electricity Generation Company of Malawi EGENCO Hilda Singo says there is need for more tax incentives in energy sector to make it attractive.
She sighted cost of production in the sector which is high.
“It is not easy to set up a generation company of electricity in the country because cost involved are high and require some incentives,” said Singo.
Meanwhile, Ministry of Finance Officer responsible for Tax, Gracian Kandiwo says the report will help in guiding some of decisions regarding tax in future.
“There are several suggestions that are coming to our attention and we will validate this report and see the way forward,” said Kandiwo.
The report among others recommends increase in VAT from the current 16.5 percent but removal of the same on some products to increase competitiveness.
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