An agreement signed in 1955 between the UK and its own colonial administrator on behalf of Southern Rhodesia (Zimbabwe), Northern Rhodesia (Zambia) and Nyasaland (Malawi) is currently being used by most British companies to dodge paying billions to Malawi in tax.
A report by ActionAid that Malawi24 has seen reveals that 52 years after gaining independence, UK companies are fraudulently using a treaty that Britain signed with its own British Governor on behalf of the three British colonies.
According to the report, the treaty that was devised by the white supremacists during colonialism with the aim of looting resources from what used to be Nyasaland, has made it impossible for the Malawi government since independence to collect tax from various UK companies that are doing business in Malawi, a reminiscent of colonialism.
“Since 1955, the UK has had a tax treaty with Malawi, the world’s poorest country, making it possible for UK companies operating in Malawi to pay little or no corporate tax. This is money that should be funding Malawi’s public services” reads part of the report, suggesting that the treaty the British companies are using continues to pin Malawi as a British protectorate to benefit the UK even to this day.
The report states that failure to pay tax by these companies has impacted negatively on investment in public services and poverty reduction programmes in Malawi, a country the World Bank has ranked the world’s poorest.
“Millions of people are living in desperate poverty. One in twenty children die before the age of 5. Schools and hospitals don’t have the money to pay staff, buy medicine or books. Women and girls living in poverty are paying the heaviest price as they struggle to access schools and hospitals” said ActionAid’s Tax Justice Policy Adviser, Anders Dahlbeck.
“We can’t do without tax. The situation is unimaginable; I don’t know what to say. The hospitals are suffering. We need companies to pay taxes” added the Tax Justice Policy Adviser.
There was no immediate comment from the UK High Commissioner responding to the report that demands to make the treaty redundant. The report was first published on Tuesday.