Airtel Malawi still concerned about high corporate tax

Mobile telecoms operator Airtel Malawi has said it is still concerned over a hike in corporate tax by three percentage points to 33 percent announced in the 2012/13 national budget.

The company has since vowed that it will continue to engage in dialogue with government to consider revising the tax rate downwards.

Airtel managing director Saulos Chilima said in an interview last week in Lilongwe that the company believes lowering down such a corporate tax would encourage investment into the country’s telecommunication sector.

“When you increase corporate tax, you are obviously taxing profits, but profits are also meant for business expansion,” he said.

In the 2012/13 budget, government increase the corporate tax levied on mobile phone companies from 30 to 33 percent.

In recent times, corporate tax has been at the centre of debate among civil society players who believe that such a tax is least contributor to the domestic tax buffer.

“We will continue to speak [on high corporate tax paid by mobile phone companies] and I don’t doubt that this will not be considered because we have a health relationship with Ministry of Finance and the Malawi Revenue Authority,” said Chilima.

He said corporate tax has an impact because it takes money that could have been declared as dividend for shareholders.

Chilima said the taxed money could also have been used to deploy additional coverage and expand the company’s footprints in the country.