Malawi Revenue Authority (MRA) has come under fire for introducing tax incentives that do not benefit small and medium enterprises (SMEs).
MRA on Tuesday this week organised an interactive meeting with SMEs in Blantyre to update them on the implementation of the 2015/16 financial year tax measures.
The meeting came a few weeks after President Peter Mutharika assented to the new Customs and Excise Act (measures) on July 27 2015, about two months after the Act came into effect on the midnight of May 22 2015.
In his presentation, MRA deputy commissioner for technical and domestic taxes Rainnie Vokhiwa said the tax collector has introduced a number of tax incentives to stimulate the growth of businesses and the economy as a whole.
He singled out the reduction of excise duty from 110 percent to 80 percent on passenger-carrying vehicles under tariff heading 87.03 exceeding 12 years of age with cylinder capacity (CC) exceeding 3 000.
Vokhiwa also said government had reduced excise duty from 55 percent to 40 percent on passenger-carrying vehicles under tariff heading 87.03, which are between zero and eight years old with CC exceeding 3 000.
However, his explanation did not please participants who questioned the motive behind the incentives.
A Ntcheu-based farmer and entrepreneur, Kenneth Chalira, argued the incentives MRA introduced are not intended to cushion lives of low-income earners and SMEs, but big entrepreneurs.
“To say the least, your tax incentives are counterproductive and a mockery to low-income earners. Who are you targeting with these incentives? How many people back home can buy a vehicle with cylinder capacity [CC] exceeding 3 000?” queried Chalira, attracting applause from fellow participants.
MRA commissioner general Raphael Kamoto assured the business community that he would forward their concerns to the Ministry of Finance, Economic Planning and Development for possible action.