Duty killing cross border businesses

Small and medium enterprises (SMEs) in Mzuzu say most businesses are shutting down due to high duty they pay to the Malawi Revenue Authority (MRA).

The entrepreneurs disclosed this recently during a Micro Small and Medium Enterprise (MSME) Survey Dissemination workshop’ in the city.

The survey, commissioned by Ministry of Industry and Trade revealed that up to 61 percent of small scale and medium businesses do not run beyond five years.

But participants to the workshop attributed the problem to “too much duty” they pay to MRA.

“MRA is the most hindering factor in cross-border trade business. We are paying a lot of money as if we are working for government yet the businesses are ours,” claimed chairperson for Cross Border Traders in the Northern Region, Screvenor Dzondzi.

Another participant said he was forced out of business due to punitive tax on imported cars.

“I used to make a profit of K200 000 after selling a car, but following the implementation of the punitive tax, my profit went down to K40 000. I was left with no choice but to quit the business,” he lamented.

In a telephone interview, MRA deputy director of corporate affairs Steve Kapoloma said the role of the authority is to implement the law.

“There is taxation law and other Acts that pass through Parliament. Our duty is simply to implement them,” he said.

Ministry of Trade and Industry Principal Secretary Alex Gomani said the survey was aimed at finding out the progress of small-scale and medium businesses in the country.

“My office will take it up with the tax people to see that MSME survival rates improve,” said Gomani.

The small business sector plays a vital role in generating income and creating employment opportunities, particularly for those with low levels of education.