Blantyre, Malawi - May 23, 2024 - Wisely Phiri, President of the Malawi Confederation of Chambers of Commerce and Industry (MCCCI), issued a stark warning about the impact of high taxes on private sector growth.

Phiri issued the warning during opening of the 34th Malawi International Trade Fair (MITF) in Blantyre.

Phiri emphasized that current tax policies are stifling both small and large businesses, undermining Malawi's economic potential.

"An additional 10% tax on companies posting profits above MWK 10 billion makes Malawi one of the most expensive destinations for foreign investors." - He stated

This policy needs re-evaluation to attract significant investments necessary for large-scale industrial development."

Phiri noted that the high tax burden on new small and medium-sized enterprises (SMEs) discourages entrepreneurship and stifles growth.

"New SMEs face taxes that can exceed 50% when combined with VAT and income tax. This high tax burden is counterproductive and discourages business formation and expansion," he added.

Phiri called for a reconsideration of these taxes, especially the affording tax, to encourage more businesses to enter the formal economy and contribute to national revenue.

He argued that reducing these taxes would attract more businesses, ultimately increasing tax revenues through broader participation in the economy.

President Lazarus Chakwera, who inaugurated the 34th International trade fair, addressed these concerns by reiterating the government's commitment to bolstering the country's export capacity through strategic policy interventions.

Speaking on the theme "Boosting Malawi's export capacity through enhanced production," President Chakwera highlighted the critical need to bridge the gap between exports and imports to stimulate economic growth.

"We are dedicated to creating an environment that fosters export growth," - Chakwera stated.

"By addressing the trade deficit, we can ensure a more robust economy that supports sustainable development."

On his part Minister of Trade Sosten Gwengwe acknowledged the issues but emphasized the government's approach to policy engagement with the private sector.

"The President has extended an olive branch for discussions. We believe in engagement, consultations, and avoiding surprises in policy matters, especially regarding revenue and tax policies." - Gwengwe said

"Our aim is to ensure that the private sector is fully involved in shaping policies that impact them."

Gwengwe also highlighted the implementation of a new system to monitor exports and ensure proper revenue reconciliation.

He acknowledged the challenges faced by some exporters accustomed to the manual system but expressed confidence in the benefits of the new approach.

"The RRPM system provides constant access to export data, helping us track how much has been exported and remitted back within the prescribed period," - He explained.

"This transparency is essential for improving compliance and ensuring that export revenues contribute to the national economy."