{"id":24486,"date":"2022-06-19T01:07:17","date_gmt":"2022-06-19T01:07:17","guid":{"rendered":"https:\/\/www.africa-press.net\/malawi\/all-news\/stuck-in-two-different-worlds-tax-payers-collectors"},"modified":"2022-06-19T01:25:11","modified_gmt":"2022-06-19T01:25:11","slug":"stuck-in-two-different-worlds-tax-payers-collectors","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/malawi\/all-news\/stuck-in-two-different-worlds-tax-payers-collectors","title":{"rendered":"Stuck in two different worlds: Tax payers, collectors"},"content":{"rendered":"

Africa-Press – Malawi. <\/strong><\/span>The Malawian taxpayer is, if the current tax regime were to be used as a yardstick, engaged in some form of soliloquy: A small, pale figure who is struggling to get out of the government\u2019s giant shadow.<\/p>\n

To begin with, there are myriad taxes, all targeted at the same individual or, in broader terms, corporate entity. \u201cWe are paying too many taxes in this country. In my case, the government gets K220,000 from me in Pay As You Earn (Paye) every month,\u201d 41-year-old Evance Kapwepwe from Thavite in Salima District said.<\/p>\n

Just this year, the taxpayer was taken unawares when the government, through its tax collection arm the Malawi Revenue Authority (MRA) started cutting more flesh from the taxes\u2019 bone. This was after the government revised the Paye schedule.<\/p>\n

For instance, although the tax-free band was maintained at K100 000, the government revised upwards other tax brackets, with the Paye of those that earn between K100,000 and K330,000 standing at 25 percent, those earning between K330,000 and K3 million being taxed at 30 percent while those earning between K3 million and K6 million are being taxed at 35 percent.<\/p>\n

People that earn above K6 million are having 40 percent of their pay chopped off. However, Malawi University of Business and Applied Sciences-based economist Betchani Tchereni does not find anything strange with the government\u2019s move to generate revenue through taxes such as Paye.<\/p>\n

\u201cThe government uses taxes to generate income for the delivery of public services.<\/p>\n

\u201cAll over the world, governments introduce one tax or another,\u201d he said. Tchereni, however, said taxes must not be seen to be punitive.<\/p>\n

Instead, they [taxes] must promote production, say, among industry players, further observing that the culture of consumption through subsidy programmes such as Farm Inputs Subsidy Programme, results in the draining of important resources from the public purse.<\/p>\n

However, according to Malawi Congress of Trade Unions president Charles Kumchenga, taxes such as Paye under the new structure have become punitive. \u201cApart from the issue of Paye, there is a need for the government to consider the cost of living, which is high in the country,\u201d he said.<\/p>\n

However, hope for workers such as Kapwepwe is wearing thing. \u201cWe continue to suffer in this country and nobody seems to care, let alone act on our plight,\u201d he said.<\/p>\n

To make matters worse, Labour Minister Vera Kamtukule promised on May 1 this year that, before May 20 2022, there would be a meeting among Employers Consultative Association of Malawi, Malawi Congress of Trade Unions and Ministry of Labour officials, where the issue of the new Paye structure would be discussed.<\/p>\n

\u201cI want to believe that, before the tripartite meeting, we should have already met [with] the Ministry of Finance and MRA [officials] to see how best we can handle the issue,\u201d she said. The outcome of that meeting is yet to be revealed to workers, who continue to reel under the financial pressure of the new Paye structure.<\/p>\n

Meanwhile, things are not working as expected in industry, with one of Malawi\u2019s oldest garments manufacturers, Crown Fashions Limited, announcing that, squeezed left, right and centre through taxes, it no longer has the will to keep on being milked thin.<\/p>\n

In a letter to the Ministry of Trade and Industry and other stakeholders, which Crown Fashions Limited Chief Executive Officer Vijay Kumar signed during the week, the company indicated that it would close shop yesterday [Friday].<\/p>\n

As expected, taxes are at the heart of the decision. \u201cThis year, the government has increased licence fees such as manufacturing licence fee, wholesale licence fee, MRA rebate licence fee, occupational safety licence fee, fire licence fee and city rates, among others.<\/p>\n

\u201cThese hikes also caused increases in production costs,\u201d Kumar said.<\/p>\n

He also bemoaned recent developments on the economic front, among them a forex squeeze, 25 percent devaluation of the Kwacha, fuel price increases, increase in fees licences and frequent power interruption on electricity as main reasons for the closure.<\/p>\n

Crown Fashions Limited CEO has also advised the government to look into the problems which they have presented in the letter for the industry to strive.<\/p>\n

\u201cWe humbly request the concerned government departments to have [a] comprehensive study about the above situation and help the industry to survive in these conditions. We have made huge investments to set up the industry in Malawi and we need the government\u2019s full support to continue the operations,\u201d the letter adds.<\/p>\n

Consumers Association of Malawi Executive Director John Kapito said, as things stand now, there is no breathing space for the consumer, who happens to be the taxpayer.<\/p>\n

\u201cFavourable policies are needed now rather than later,\u201d he said.<\/p>\n

However, as people and industry are crying foul over taxes, MRA has been swimming in the sea of workers and employers\u2019 taxes. In April, for instance, MRA beat its target by K5.8 billion.<\/p>\n

No wonder, MRA Commissioner General John Biziwick has been downplaying fears of a possible squeeze in government revenue in the aftermath of devaluation of the Kwacha.<\/p>\n

\u201cDevaluation entails the realignment of the exchange rate. When you look at the level of the exchange rate now, it is what it was at the black market. Immediately, it should be able to assist businesses because forex may be available.<\/p>\n

\u201cIn fact, it means that value for duty purpose will be higher; as such, we should be able to get more [revenue]. This means that there will be more imports, which mean more taxes for us,\u201d Biziwick said.<\/p>\n

He is upbeat of the revenue collection body\u2019s chances of beating the K1.636 trillion revenue target for the 2022-23 Financial Year. In April 2022, which happens to be the first month of the financial year<\/p>\n

For More News And Analysis About Malawi<\/a> Follow Africa-Press<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – Malawi. The Malawian taxpayer is, if the current tax regime were to be used as a yardstick, engaged in some form of soliloquy: A small, pale figure who is struggling to get out of the government\u2019s giant shadow. To begin with, there are myriad taxes, all targeted at the same individual or, in […]<\/p>\n","protected":false},"author":84,"featured_media":24485,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,5,8],"tags":[233,371,4821,234,4820,4822],"class_list":{"0":"post-24486","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","6":"hentry","7":"category-all-news","8":"category-economy","9":"category-homepage-english","10":"tag-africa-press","11":"tag-africa-press-malawi","13":"tag-malawi","14":"tag-tax-payers","15":"tag-workers"},"yoast_head":"\nStuck in two different worlds: Tax payers, collectors - Malawi<\/title>\n<meta name=\"description\" content=\"The Malawian taxpayer is, if the current tax regime were to be used as a yardstick, engaged in some form of soliloquy: A ...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/malawi\/all-news\/stuck-in-two-different-worlds-tax-payers-collectors\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Stuck in two different worlds: Tax payers, collectors\" \/>\n<meta property=\"og:description\" content=\"The Malawian taxpayer is, if the current tax regime were to be used as a yardstick, engaged in some form of soliloquy: A ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.africa-press.net\/malawi\/all-news\/stuck-in-two-different-worlds-tax-payers-collectors\" \/>\n<meta property=\"og:site_name\" content=\"Malawi\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/AfricaPressTunisiaa\" \/>\n<meta property=\"article:published_time\" content=\"2022-06-19T01:07:17+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-06-19T01:25:11+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/static.africa-press.net\/malawi\/sites\/36\/2022\/06\/postQueueImg_4-62ae7ad7b3f77.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1261\" \/>\n\t<meta property=\"og:image:height\" content=\"1093\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"cfeditoren\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"cfeditoren\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"5 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.africa-press.net\/malawi\/all-news\/stuck-in-two-different-worlds-tax-payers-collectors#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.africa-press.net\/malawi\/all-news\/stuck-in-two-different-worlds-tax-payers-collectors\"},\"author\":{\"name\":\"cfeditoren\",\"@id\":\"https:\/\/www.africa-press.net\/malawi\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb\"},\"headline\":\"Stuck in two different worlds: Tax payers, collectors\",\"datePublished\":\"2022-06-19T01:07:17+00:00\",\"dateModified\":\"2022-06-19T01:25:11+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.africa-press.net\/malawi\/all-news\/stuck-in-two-different-worlds-tax-payers-collectors\"},\"wordCount\":962,\"commentCount\":0,\"image\":{\"@id\":\"https:\/\/www.africa-press.net\/malawi\/all-news\/stuck-in-two-different-worlds-tax-payers-collectors#primaryimage\"},\"thumbnailUrl\":\"https:\/\/static.africa-press.net\/malawi\/sites\/36\/2022\/06\/postQueueImg_4-62ae7ad7b3f77.jpg\",\"keywords\":[\"Africa Press\",\"Africa Press-Malawi\",\"Crown Fashions Limited\",\"Malawi\",\"Tax payers\",\"Workers\"],\"articleSection\":[\"all news\",\"economy\",\"homepage-english\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.africa-press.net\/malawi\/all-news\/stuck-in-two-different-worlds-tax-payers-collectors#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.africa-press.net\/malawi\/all-news\/stuck-in-two-different-worlds-tax-payers-collectors\",\"url\":\"https:\/\/www.africa-press.net\/malawi\/all-news\/stuck-in-two-different-worlds-tax-payers-collectors\",\"name\":\"Stuck in two different worlds: Tax payers, collectors - 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