Malawi’s creative sector has pleaded for government support and tax penalty waivers to help the country’s artists overcome the stinging financial barriers.
The creatives said this, including provision of simpler tax measures, could ease the tax burden, unlock the sector growth and increase revenue.
Leaders of rights holder associations made the plea in Blantyre on Tuesday during a stakeholder engagement with Malawi Revenue Authority (MRA) on taxation in the creative industry.
The meeting sought to provide an overview of the legal framework governing taxation in the creative industry and engage leaders on practical approaches to its implementation.
Book Publishers Association of Malawi (Bpam) president John Paul Yohane said creatives need government backing to build a vibrant industry capable of generating more income and taxes.
“Creatives need government support and in some cases penalty waivers for them to grow the creative industry.
“With adequate capacity building, artists will be able to generate more revenue and in turn pay more tax,” he said.
National Arts and Heritage Council (Nahec) task force chairperson Ron Muphuwa said creatives fear penalties and audits because many lack adequate information on how to comply with tax laws.
He further said creatives face several tax challenges, including a 20 percent withholding tax on contracts, uncertainty over taxable income and complicated filing requirements.
Muphuwa also cited high duty and value added tax (VAT) on imported cameras, instruments, lights, software and costumes, among others, that make production expensive.
“Creatives also want reduced duty on essential tools of trade and consideration of penalty relief for newly registered artists… But we are happy that MRA recognises creatives as a key sector,” said Muphuwa in an interview.
MRA Taxpayer Service Unit (Domestic Taxes Division) manager Elizabeth Chiocha-Chimtengo said the authority identified a compliance gap in terms of the creative sector taxation and engaged the leaders to improve their understanding of tax obligations.
She said creatives need better knowledge of tax registration, filing, payment and accurate reporting.
“We have indeed gathered that there is a compliance gap. So as partners, we will work together for each one of us to play their role for taxes to be collected accordingly,” said Chiocha-Chimtengo.
She, however, stressed that creatives earning income are by law required to pay taxes like other sectors because widening the tax base is important for national development.
A study conducted by Copyright Society of Malawi, in collaboration with National Statistics Office and United Nations’ World Intellectual Property Organisation in 2013 found that the creative industry in Malawi contributes about 3.46 percent of the Gross Domestic Product.
