THE POOR PAY INDIRECTLY FOR SUBSIDISED FERTILIZERS IN MALAWI

Oftentimes, poor citizens think subsidized fertilizers provided by government are free gifts. This is what our chiefs tell the poor in the villages as agents of government. This is not truth. Government does not create money. Government makes money by collecting taxes from citizens. There are two different types of taxes. Direct and indirect taxes. Government also collects profits from statutory companies like Admarc. Citizens who go to work pay direct tax after being deducted from their salary incomes and withholding taxes, while indirect taxes are paid when citizens buy or consume services from groceries, shops and hospitals. When villagers take their maize to the maize mill, the milling price recovers fuel indirect taxes imposed by the government. When citizens buy salt, bi-carbonate of soda, ride a mini bus they actually paying taxes indirectly. According to the zero budget system there is no citizen who does not pay taxes. Even unborn children are now paying taxes when their expectant mothers visit clinics through the fees at the hospital. For a country to avoid paying high taxes, there is need for three things; a good leader, foreign donor support and foreign direct investments. A good leader protects the poor from paying the high taxes by sacrificing his expenses. Foreign donors externalize some of its excess tax revenue to friendly countries to help protect the poor. Foreign direct investments bring in the much needed foreign exchange into an economy thereby helping a poor country own foreign currency that is used to import basic necessities and factors of production. The combined effects of these three factors help to improve the revenue of a country. Therefore, it is important for poor citizens to know they the subsidized fertilizer they receive as gift is not gift. They pay for it through payment of invisible taxes.