HRDC threatens to drag Govt to court over new VAT law


Human Rights Defenders Coalition (HRDC) has demanded the Malawi Government to suspend enforcement of the Value Added Tax (amendments) Act of 2021, saying the new law will affect the actualization of Malawians’ rights to economic activity, equality and dignity.

In a letter to the office of the Attorney General, the rights group has said it will drag government to court if enforcement of the law is not suspended.

Yesterday, the Bankers Association of Malawi (BAM) announced the introduction of VAT on some banking transactions following the amendment of VAT.

According to Malawi Revenue Authority (MRA), these services include fee for providing statements, payment orders or transfers and charges for provision of online banking. Other services credit card late payment fee or limit excess fee, charges for withdrawals from any ATM and interchange fees between banks.

In the letter signed by its lawyer Wesley Mwafulirwa, HRDC, says it has expressed concern over the new VAT law on behalf of individuals represented by women doing small businesses, the elderly  who receive remittances from their children and grandchildren working outside of the country, people living with disabilities, peasant farmers and other Malawians.

According to HRDC, interchange services between banks are mostly done through ATMs and there are places in the country with only single service providers and inter-banking has helped the rural masses with banking services.

The coalition also noted that mobile banking transactions have greatly helped with financial inclusion of the vulnerable groups of our communities especially in times of covid-19.

“Our clients’ opinion is that all the above amendments to the law will greatly and
adversely impact their rights to equality, to economic activity and dignity.

“The amendments have the potential to further widen the gap between the rich and
financially marginalized members of our community. In the process, their rights
to an inclusive formal financial sector will be greatly impeded by the proposed amendment to the law,” reads part of the letter.

The HRDC has since demanded that the amendments should not be enforced and has advised the office of the Attorney General to start facilitating the process of reviewing the controversial sections of the amended law.

“Kindly be advised that if the above demands are not met and the law comes into force, our instructions are to proceed with Constitutional review of the impudged
amendments. Be further advised that this letter may be used to claim party and party costs against your office,” reads part of the statement.