Abstract

Value added tax (VAT) in Malawi has recently been extended from the manufacturing stage to wholesale and retail stages and seems to become the mainstay of the tax revenue. This study was carried out to investigate the administrative implications of this extension. determine the administrative feasibility of the extension, this study examined the effectiveness of the current administrative provisions, and semi structured questionnaires were designed and administered to a probability systematic sample of 102 major stakeholders of VAT in Malawi comprising VAT registered taxpayers, and tax administration officials directly involved with the operation of VAT. The purpose was to ascertain their attitudes toward the current administrative provisions and the resultant implications. The data collected were analyzed using SPSS, Microsoft Excel, and Decisional Analyst. The results of the research were tabulated and groups of responses were analyzed using descriptive statistics. The Chi - Square test was used to provide a statistical foundation to accepting or rejecting the null hypotheses. The study found statistically significant differences (p < 0.05) in the attitudes observed and those expected regarding the two null hypotheses about the feasibility of the current VAT administrative provisions, and whether the extension of VAT to wholesale and retail stages has contributed to the administrative implications. Both of the null hypotheses were rejected. It is therefore concluded that the current administrative provisions are feasible for effective management of an extended VAT scope in Malawi. Secondly, it is also concluded that the extension of VAT to wholesale and retail stages in Malawi has contributed to administrative implications. These findings suggest that there is more work to be done to improve VAT administration. The results have led to recommendations for a staged approach to improve systematic information management and review the minimum turnover limit for registration for VAT.

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School	: School of Law, Economics and Government
Issued Date	: 2008

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