Monday, September 17, 2007

Why Malawi Needs Tax Justice

By Mwaona Nyirongo

The issue of poverty has made headlines in almost all types of media. It has been claimed by scholars that about eight million people die each year on a global scale as a result of poverty. Not only that – millions of children are also denied access to education because of poverty. In essence, it must be acknowledged that this situation is well defined in developing countries.

One of these developing countries is Malawi, a country that lies in the southern part of Africa. It is a densely populated country with its largest population living below the poverty line; thus many people survive on less than a dollar per day. Some elite Malawians place blame on the international financial system for this economic stagnation. This piece of writing therefore tries to shade more light on economic injustice with regard to the objectives of the Tax Justice Network and the issues of tax.

Very few Malawians know the truth about the injustice that monetary organizations and corporations inflict on their country. All they know is that Malawi has economic partners who assist them financially. Little do they know that such an international financial system just works to create an economic tourism rather than boosting the economy. The integration of Malawi into the world economy has prompted the coming of mafia-like economic gurus who have in essence milked Malawi severely. The acts of such gurus have reduced Malawi to a country for profit-making rather than development.

The above phenomenon is attributed to the fact that many multinational companies in Malawi sign contracts which include many tax holidays. The companies also rely on transfer pricing to shift their profits to another country. Thus, the Malawi government is not able to collect the necessary tax. This therefore implies that Malawi needs an economic enlightment, which is equally the same with tax justice. From such an understanding, it is quite apparent that Malawi indeed is in need of tax justice.

Mwaona Nyirongo is a second year student at Domasi College of Education in Malawi studying history and geography.

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