Chamber says budget is promoting consumption

In BUSINESS, the Malawi Confederation of Chambers of Commerce and Industry (MCCCI) has faulted the 2013/2014 government budget for what it calls subsiding consumption through some tax measures announced by Finance Minister Ken Lipenga when he presented the plan in parliament.

Making a contribution during a Malawi Economic Justice Network (Mejn) organised meeting in Lilongwe on Friday where an expert analysis of the budget was presented to Members of Parliament, MCCCI Chief Executive Officer, Chancellor Kaferapanjira cited removal of import taxes on buses, motorcycles and bicycles as promotion of consumption.

“The government is subsiding consumption and promoting importation of such finished products instead of promoting local production,” said Kaferapanjira.

He said the tax measures give advantage to foreign companies producing such products as they will benefit more through increased imports from the country while Malawi loses more foreign exchange.

Kaferapanjira said government should have instead removed or reduce taxes on spare parts and other materials for production to promote local production and job creation locally.

The MCCCI boss also said the K60 billion Farm Input Subsidy Programme remains a costly programme that benefits traders more than the poor farmer.

The World Bank is currently sponsoring a study to ascertain the necessity of the subsidy programme which has been criticised by many stakeholders in the country.

Minister of Finance Ken Lipenga recently defended the tax measures in his budget, saying they are intended to reduce poverty through job creation. – By Kingsley Jassi