NCA-DCA URGES MALAWI TO BACK UN TAX PLAN
The training on the UN tax plan comes as Malawi is signing new mining development agreements.
LILONGWE, Malawi - The head of programs at NCA-DCA urged Malawi on Tuesday to support a United Nations effort to regulate taxation and prevent profit shifting by multinational corporations, writes Winston Mwale.
"This is a perfect moment and turning point for Malawi," Paul Mmanjamwada said in opening remarks at a UN Tax Convention in Lilongwe.
He said the convention aims to address "illicit financial flaws" by foreign investors that deprive poor countries like Malawi of tax revenue.
Mmanjamwada said Malawi provides incentives like tax holidays to attract foreign investment but then must squeeze small businesses and individuals domestically to make up for lost revenue.
He said Malawi goes into debt to keep providing public services.
"Having recognized that resources for increased financing and spending comes from local revenue and good tax policies, we are working with councils across Malawi to build capacity and support local revenue generation," Mmanjamwada said.
At the national level, he said his organization engages parliament and the Finance Ministry to increase health, education and social protection spending.
Mmanjamwada applauded the government's commitment to enhance revenue collection and curb corruption.
But he noted Malawi's past development deals with foreign investors "presented a gleamy undertaking but watered down by the provision of 'stability clauses' that held Malawi at ransom."
"Foreign investors make profits from using resources in our country. Therefore, they should pay tax where business is done, and profits are made," Mmanjamwada said.
The training on the UN tax plan comes as Malawi is signing new mining development agreements.
Mmanjamwada said Malawi should process its minerals domestically to benefit more from corporate taxes.
"This has come at the right time," Mmanjamwada said of the convention.