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Study shows VAT collection not doing well in Malawi

A local researcher, Dr. Donasius Pathera, has disclosed that Malawi is not doing well in collecting Value Added Tax (VAT) compared to personal income tax.


Pathera attributed this to lack of demand for transparency and accountability and lack of knowledge by people on how this tax is collected and used.

Dr. Pathera was speaking this in Lilongwe where Norwegian Church Aid (NCA) and DanChurchAid (DCA) Malawi Joint Country Programme is holding a capacity building engagement on tax literacy with stakeholders like faith and Civil Society Organization (CSO) leaders on United Nations (UN) Tax Convention.

The training seeks to advocate and promote the adoption of the UN Tax Convention.

According to Dr. Pathera, people in the country are reluctant to demand receipts from shops and companies once they buy them products hence poor performance on the collection of VAT. 

The training in session

“If we are not demanding receipts, what happens is that the tax does not go to the government. The one whom you have bought things from is the one who benefits”, 

“We need to do more public awareness on that. If we are to realize MW2063, we need to start doing better in terms of tax collection”, he said.

In his remarks, NCA-DCA Malawi Joint Country Programme’s Head of Programme, Paul Mmanjamwada says the capacity building of this kind will address such gaps in tax bands.

“We have brought a diverse group of individuals from government, CSOs and faith actors that would certainly want to discuss issues affecting our country especially on the UN tax convention”, said Mmanjamwada.

The UN general assembly’s financial and economic committee adopted a resolution on the promotion of inclusive and effective international tax cooperation at the United Nations in 2022.

The adoption paved the way for negotiations and produced an international tax cooperation hence Mmanjamwada hopes the engagement in Lilongwe that will end on Thursday this week, will also establish how the UN Tax convention evolved into an international law, among others.

One of the participating CSOs is Malawi Economic Justice Network (MEJN) whose board’s vice chairperson, Rev. Innocent Chikopa says the training of this kind is very beneficial to a developing nation like Malawi.

He agrees with recommendations by Dr. Pathera on what should be done to make the taxes more meaningful and beneficial to people but pleaded if authorities can accommodate only those that are in line with Malawi’s economy.

“Taxes are good because they are helping to run our countries. They are high yes but we cannot stay without them”, he concludes.

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