The media fraternity has welcomed the removal of VAT on newspapers, describing it as good news in the interest of the peopleâ€™s right to information.
Anthony Kasunda, chairman of the Media Institute for Southern Africa Malawi chapter, said on Friday the removal of 16.5 percent value-added tax in this yearâ€™s national budget is proof that the Joyce Banda administration is serious about supporting the growth of the media industry in the country.
â€œThis is good news for us and another good signal from government about how they want journalists to work in a free environment and make sure that information is accessible by everyone cheaply,â€ Kasunda said in reaction to the budget presentation by Finance Minister, Dr. Ken Lipenga.
Media Council of Malawi chairperson Patrick Semphere said the removal of VAT on newspapers was a welcome move and a sign that government has goodwill for the media in the country.
Said Semphere: â€œWe and Misa-Malawi have been fighting for the removal of that tax. The removal is a step in the right direction. It is an indication that government has goodwill at heart for the media.â€
General manager of Blantyre Newspapers Limited Dr. Tikhala Chibwana also welcomed the removal of the VAT and added that the company would go back to the drawing board to consider newspaper cover prices because its adjustment to the current price was partly due to the VAT.
â€œThat is a welcome development. I think the idea to tax public information was a very wrong idea and government has done the right thing. We have been speaking against it and for anybody in the media, especially in print, that is what we expected,â€ said Chibwana.
Alfred Ntonga, deputy chief executive officer and editor-in-chief of Nation Publications Limited, also hailed the removal of VAT on newspapers, saying it is a step forward in correcting the many mistakes made by the previous Mutharika administration.
â€œAccess to information is a right in democratic Malawi. By imposing VAT on newspapers which are already very expensive to produce, the previous administration was simply pushing them beyond the reach of the majority of Malawians.
â€œOf course, the so-called zero-deficit budget the previous regime introduced last year required broadening the tax base, but I strongly suspect that the real reason for the VAT on newspapers was to reduce their circulation. The Mutharika administration was averse to critical media,â€ said Ntonga.
Besides the removal of VAT, government earlier repealed amended Section 46 of the Penal Code which gave a minister powers to ban a publication deemed to be publishing against the public interest. However, Malawi is yet to enact the access to information Act to enforce the requirement for government to provide the public with information required in the exercise of their rights.
People have also welcomed the announcement that government would start collecting the motor vehicle licence fee from the fuel, saying this will help curb corruption and improve efficiency.
â€œThis will help stop corruption at the Road Traffic and increase efficiency in collecting revenue for government. It will also help save time for a motorist like myself,â€ said Wellington Phiri, a public servant.
Lipenga also announced the removal of VAT on financial services, bread and machinery. The minister said VAT on machinery has been removed to help attract investment.
The price of bread rose by up to 30 percent following the introduction of VAT last year amid devaluation and fuel price hike.
Lipenga also increased excise duty on alcohol in sachets and plastic bottles from 150 percent to 250 percent to help reduce alcohol abuse by minors.
He also announced an increase in corporate tax for cell phone operators from 30 percent to 33 percent, a measure likely to lead to an increase in tariffs.
Meanwhile, Malawi expects to see its economy to grow by 4.3 percent this year and 5.7 percent next year while inflation will remain in double digits, largely due to a recent devaluation of the kwacha, Lipenga told Parliament yesterday.
â€œInflationary pressures in 2012 continued to rise, reflecting a loose fiscal and monetary stance. Coupled with the pass through from currency adjustments, we now estimate inflation in 2012 at 18.4 percent with the prospects of decelerating to 16.1 percent in 2013…â€ he said.
Malawiâ€™s economy had been in a tailspin for about a year after former president the late Bingu wa Mutharika picked a fight with major donors that led a $121 million budget hole in the 2011/12 fiscal year.
But the new government installed in April has worked to restore aid flows. Lipenga said grants have for the 2012/13 budget increased by 140 percent compared to the previous year.
â€œGrants from cooperating partners have increased by 140 percent reflecting renewed confidence in the new government of President Joyce Banda who…has not only said the right things but also done the right things,â€ Lipenga said.
Last year donors had committed K52.68 billion (about $210 million).
He projected total revenues and grants for 2012/13 at K394.47 billion ($1.6 billion) up from the revised K307 billion ($1.3 billion).
â€œThe key objective of this budget is to restore macro-economic balance and a market-based economy that will provide a foundation for sustainable economic growth in future,â€ the minister said.