mining taxes, treaties


Some 35 civil society organisations (CSOs) have asked Finance, Economic Planning and Development Minister Goodall Gondwe to drop his plan  for a new tax regime for mining companies, saying there have been no consultations on the matter.

Also last week, another consortium of CSOs wrote Parliament, asking legislators to push government to immediately review old treaties Malawi signed with several countries, including the United Kingdom (UK) on tax exemptions.

In an open letter to government, the CSOs under the banner of Natural Resources Justice Network (NRJN), said government should pend the new taxes until the Mines and Minerals Act is passed.

Mchenga Coal Mine: Government has been asked to pend its proposed tax regime
Mchenga Coal Mine: Government has been asked to pend its proposed tax regime

“We understand that the review of the Mines and Minerals Act, including the fiscal regime, has been made possible by the World Bank through the Mining, Governance and Growth Support Project2 which aims “to improve the efficiency, transparency and sustainability of mining sector management in Malawi. [And] $25 million has been borrowed by the Government of Malawi for this project.”

However, the CSOs fear for the sector, noting that despite joining the Transparency Initiative, government was still keeping its activities discreet.

Adds the letter:  “In addition, the government has committed to transparency and accountability and has led the way in Malawi signing up to the Extractive Industries Transparency Initiative. Yet the move to table changes to laws without involvement of key stakeholders on the fiscal regime runs counter to government’s commitment to transparency and accountability. This is unacceptable and not a sign of good faith.”

However, Gondwe in an interview, rejected the assertion that Treasury  should have consulted the civil society and other stakeholders before taking the plans to Parliament.

“I don’t need to consult everyone because the law says I should consult Parliament and that is what I am doing,” said Gondwe.

The tax regime bill aims at providing clarity in the determination of taxable income, incentives and proposals to transfer the administration and collection of royalty from the Ministry of Mines to the Malawi Revenue Authority  (MRA). n

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