HRDC backs tax stamps,highlights economic benefits
Human Rights Defenders Coalition (HRDC) has backed the Malawi Revenue Au thor i ty ’s (MRA) introduction of tax stamps, arguing that the measure will be instrumental in boosting the economy and improving the lives of Malawians.
MRA introduced the tax stamps in May to boost revenue collection as part of broader public finance management reforms. However, some sections of the private sector have expressed reservations over the project’s timing.
In a statement signed by its national coordinator Kelvin Chirwa and chairperson Gift Trapence, the HRDC commended MRA for its inclusive approach in rolling out the tax stamps, emphasizing the importance of involving civil society organisations in the process.
The coalition noted that the tax stamps excise regime will be crucial in generating revenue for essential services such as healthcare, education, and infrastructure . Furthermore, the HRDC believes that tax stamps will play a pivotal role in combating tax evasion and fraud.
The statement reads: “By ensuring that all goods are properly taxed, the government can create a level playing field for local industries, protect consumers from substandard products, and promote fair competition.”
HRDC’s show of support follows concerns from local firms that the tax regime, dubbed Kalondola Project, would hurt micro, small and medium enterprises which are still reeling from the economic fallout caused by last year’s devaluation of the kwacha by 44 percent.
“Most businesses will collapse because entrepreneurs are still struggling to cope with the realities of last year’s devaluation which has raised commodity prices,” said entrepreneur Dumiso Nyirenda of Ola Magents Club. “Most businesses cannot absorb this tax without passing it on to their consumers.”
Other entrepreneurs have expressed concern that getting the tax stamps will further push their costs of production. The firms, thus, urged the revenue collecting authority to extend the transition period from July 31 to December 31 to allow them time to adjust.
Nonetheless, MRA maintains that the tax stamps are not a new tax measure, but rather, an affirmation that a business has paid all relevant taxes.
Going forward , implementing the tax reforms without compromising on the business interests will require sustained dialogue between local firms, MRA and CSOs
