Players in the private sector have decried exorbitant corporate tax targeting the industry, saying the policy move will deter government’s drive to attract more investors into the country.
In the 2024/ 2025 budget pegged at MK5.98 trillion, government has proposed the extension of the application of the additional 10 percent corporate income tax on profits above K10 billion to all businesses that make such profits in order to ensure equal and fair treatment of super normal profits.
However, in an interview, Lekani Katandula, President for the Malawi Confederation of Chambers of Commerce and Industry (MCCCI) said the decision is counterproductive and will discourage big investments like those in areas of mining and mega farms, as it indirectly restricts investors from investing above K10 billion.
According to Katandula, the assumption that profits above K10 billion are automatically ‘super normal’ regardless of how much is invested in the enterprise is misleading, and has since called on government to create a conducive business environment to attract more investors.
“Furthermore, if this tax policy is implemented as proposed, Malawi’s Corporate Tax stands to be the highest in the SADC region which will ultimately push investors to other countries with more favorable policies. Government should therefore reconsider this tax policy measure by removing it in its entirety,” he said.