During the 2019/20 pre-budget consultation meeting, the Institute of Internal Auditors Malawi (IIA-M) has asked Treasury to consider reducing value added tax (VAT) to between 14-15%.

Compared to neighbouring countries, Malawi’s VAT is higher, according to IIA-M President, Thokozire Kuwali, who also presented figures that VAT in Botswana is pegged at 12%, 15% in South Africa, Zimbabwe and Swaziland while in Kenya and Zambia it is at 16%.

Agreeing with the above, the Malawi Confederation of Chambers of Commerce and Industry (MCCCI), represented by its head of real sector and macroeconomic policy, Hope Chavula emphasized that businesses are already burdened and cannot afford a tax increment.

The request comes at a time when the Mid-Year Budget Review presented by (former) Minister of Finance Goodall Gondwe, showed that corporate tax underperformed during the first half of this fiscal year as figures show that a 20.3% drop was registered, when compared to figures from the same period in 2018. According to the presentations by the minister, Treasury amassed K479 bn, which was lower than K456.7 bn collected last year.