Tax Reforms in Malawi

Abstract

The paper reviews Malawi's tax reform efforts initiated in the mid-1980s, with the assistance of the World Bank. It outlines the economic context leading to the reform, characterized by a revenue crisis and inefficiencies in the tax system. Following a request from the Malawian government in January 1985, the World Bank conducted a comprehensive analysis of the tax structure, identifying weaknesses and proposing changes aimed at increasing efficiency and equity. The primary objectives of the reforms included reducing distortions in production and investment incentives while ensuring that the new system generated at least as much revenue as the previous one. The implementation process faced various challenges, and the paper concludes with reflections on the lessons learned from Malawi's experience with tax reform.

This summary encapsulates the main themes and objectives of the tax reform in Malawi, alongside the ongoing impact and evaluation of the reforms implemented during this period