The Malawi government recently increased the duty on importation of cars higher than the purchasing price. This has led to confusion and frustration among many Malawians, who do not understand why the government would impose such a high tax.
The Tonse Alliance Government’s Intentions
The general understanding by the citizenry was that the Tonse Alliance Government wanted to develop Malawi fast and efficiently. However, there is no evidence to support this claim. In fact, the government has not provided any clear explanation for why it increased the duty on importation of cars.
The Effects of High Taxes
Higher taxes can lead to lower wages, as people may be discouraged from working if they know that a large portion of their income will be taken away in taxes. This can have a negative impact on the economy, as it can lead to a decrease in productivity.
Examples of High Taxation in History
There were many effects of high taxation on the people in Rome. For example, many people were driven to starvation and bankruptcy, and the economy was in a state of turmoil. In ancient Athens, only the very wealthiest people paid direct taxes, and these went to fund the city-state’s most important national expenses – the navy and honors for the gods.
The French Government’s Reasons for Increasing Taxes
The French government increased taxes to address various economic and social issues. For example, the taxes were meant to fund social welfare programs, reduce public debt, meet European Union (EU) requirements, address climate change, and promote equality and fairness.
The Liturgy Tax in Ancient Athens
Ancient Athens had a tax, called a liturgy, that fell largely on the wealthiest 1% of the population. These individuals were expected to pay the entire cost of provisioning, paying the wages for, and fully equipping a trireme warship for an entire year.
The Reasons for Louis XVI’s Tax Increase
Louis XVI of France needed to raise taxes because of the increasing national debt and chaos of the economy. France had loaned a significant amount of money to the United States during the American Revolution, and this had a significant impact on the French treasury.
The Effects of High Taxes on Business
Great Britain increased taxes to pay down a national debt approaching £140,000,000 after defeating France in the Seven Years War (1763). A year earlier, Parliament passed the Sugar Act, their first revenue-raising measure. Both taxes promised dire consequences in a post-war economy.
The Good Aims of Taxation
The good aim of tax is for government to collect enough revenue to pay down national debt, fund the military, fund public works, establish trade networks, develop a country, and address various economic and social issues. However, before it reaches its intended purpose, taxpayers’ money is often embezzled through corruption, overspending, and there is little or nothing to show on the ground. On the contrary, it is very difficult to do business in Malawi where tax is high.
The Impact of Corruption on Development
Embezzlement of public funds slows down development and creates shortages of drugs in hospitals. It also keeps Malawi moving round in circles for years without achieving anything.
Conclusion
In conclusion, the Malawi government needs to be more transparent about its reasons for increasing taxes. It also needs to take steps to ensure that taxpayers’ money is not embezzled. If the government does not address these issues, it will be difficult for Malawi to achieve its development goals.
