Tax reform in Malawi

Abstract

This paper examines Malawi's recent efforts to reform its tax system. Malawi embarked on a comprehensive tax reform with World Bank assistance in the latter half of the 1980s. This paper concentrates on the problems in the revenue system that provided the impetus to reform, the nature of the solutions that were offered, and the issues raised in implementing the reforms. Since many of these reforms are still being introduced into Malawi's economy, their ultimate success will have to await future analysis. This paper gives an overview of Malawi's economy and tax system and discusses its evolution up to the time of the Bank's involvement in the mid-1980s. The reform agenda is outlined and the implementation of that agenda to date is discussed. The paper concludes with a brief set of lessons that can be learned from the Malawi experience.Environmental Economics&Policies,Public Sector Economics&Finance,Economic Theory&Research,Banks&Banking Reform,Municipal Financial Management