Review corporate tax rates—MCCCI

 Malawi Confederation of Chambers of Commerce and Industry (MCCCI) has urged government to review the corporate tax rate, which it says at 40 percent, is the highest in the region.

Speaking on the sidelines of the MCCCI 2024 Business Leaders Summit official opening on Friday, MCCCI immediate past-president Lekani Katandula said the country’s tax regime has made doing business challenging.

He said: “We are growing backwards because of lack of international competition, we need to find ways of making Malawi a more competitive business environment

“It is not ideal that our corporate tax rate at 40 percent is the highest in the region, that is taking Malawi backwards as an investment destination. We need government to rethink that very quickly.”

Katandula, who is Illovo Sugar (Malawi) plc managing director, said while businesses are aware of the pressing demands on the part of government that would make it impossible to have a lower rate in the region, bringing it down to an average would make a meaningful impact.

He said: “Ideally, we would be closer to the lower ones, but we know the many other demands mean that we can’t get there quickly, but certainly we can’t be the worst.

“We are aiming at being average whilst improving our electricity supply, security around the country to attract people to come to Malawi. People are finding it hard to come and invest here.”

 On his part, Press Corporation Limited chief executive offiver Ronald Mangani observed that considering that the private sector is touted as the engine of economic growth, the fact that the economy is not growing means the private sector is not meeting expectations.

“It is very clear that challenges we face are challenges of production. The economy is not producing enough and not able to meet the consumption demand of the economy,” he said.

In the past three years, Malawi has experienced weather shocks, unprecedented health and geo-political conflicts.

The shocks, according to MCCCI, continue to pose a threat to businesses, including continuous liquidity challenges in foreign exchange markets, high global commodity prices have left a toll on agriculture, energy, and infrastructure development.

Considering these trends, MCCCI says the country is expected to achieve a growth rate of two percent in 2024.

On his part, Minister of Trade and Industry Sosten Gwengwe admitted that the tax regime is not conducive for businesses, a situation that he said government is working to address.

“We are doing all these reforms, cognisant that better economic conditions are needed for companies and individuals to invest, create employment, encourage entrepreneurship, innovation, and creativity.

“The lessons learnt from the occurrence of such shocks, therefore, call for a complete transformative strategy that revamps business operations completely.”

Meanwhile, Wisely Phiri, Sparc Systems managing director, has been elected new MCCCI president, taking over from Katandula.