DPP MP Lipipa reiterates his reservation with 2024/25 budget: “Its populist but unrealistic.”
DPP MP for Blantyre City South Noel Lipipa has reiterated his earlier stand on the 2024-2025 budget estimates emphasizing that the financial plan delivered by the Minister of Finance and Economic Affairs, Hon. Simplex Chithyola Banda, MP is not only bordering on populism but unrealistic.
Writing on his Facebook page in response to the approved plan, Lipipa said the budget estimates that, MRA will collect MK3.3 trillion ignoring the fact that the private sector is besieged due to forex shortages and high interest rates.
“MRA’s failure to collect the MK.3.3 trillion will choke the development budget, salaries will be delayed, and ORT cuts will occur. This is because of mandatory expenditures such as wages (Mk.1.3 trillion), domestic debt (Mk.1.2 trillion) and pensions/gratuity (440 billion) are paid into the consolidated fund,” he said.
He added that the increase in the non-tax wage bracket on the budget estimate reduces revenue collection by 20 billion, while the increase in the CDF to MK200 million adds MK.19 billion, putting pressure on revenue collection of MK.3 trillion.
“The SONA is not in sync with the budget. The ATM strategy has been trivialised. The amounts allocated to agriculture, roads to tourist and mining areas have been disregarded. Mining consumes a huge amount of energy, yet the budget for the Ministry of Energy does not reflect this,” he said.
He added that there is also significant wastage in domestic travel, including driver costs, vehicle abuse, and excess drivers.
Lipipa suggested that the solution could immediately making swift and serious reforms to reduce expenditure, avoid wastage, and reduce borrowing.
“Introduce a contributory scheme to eradicate our appetite for SUVs which will save the Malawian taxpayer loads of money.
Parliament needs to urgently amend legislation to require RBM to disclose all currency swaps and determine their public interest. This is crucial as losses are automatically recovered from the treasury,” he noted.
He also spelled out that currency swaps are negatively impacting the economy and triggering transparency issues within the Reserve Bank of Malawi (RBM).
“An incentive to the private sector through Import substitution is needed. This will reduce forex requirements, increase employment, and improve revenue collection through PAYE,” he said.
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