An assessment of import duties and their impact on non-governmental organizations development projects in Malawi

Abstract

This study examined both the administrative and tax aspect of the government intervention in the donor funded projects that are implemented by NGOs. In order to get valid and reliable results data were collected from donors, government offices and NGOs. These three dimensions are the major stakeholders on NGO development activities in Malawi. A self administered questionnaire was designed and administered to a stratified sample of 46 NGOs, 7 major donors and 8 government offices who have directly or indirectly linkage to NGO. The data collected were analysed using an SPSS, Microsoft excel and data analyst. The results of the research were cross tabulated and groups of responses were analysed using descriptive and inferential statistics. Correlation between the variables was computed and analysed. The results of the study shows that most of the NGOs and donors rated import tax and tax rate as high, with the process at customs causing unnecessary delays and inefficiency. Furthermore, the administrative aspect of the government intervention is viewed in terms of coordination, regulation, employment permit procedure and licensing and registration of new NGOs. The outcome of the study shows the coordination, regulation and licensing and registration of new NGOs are very important; and the employment permit procedure is less important. Furthermore, the correlation part of the study shows: - there is a positive and significant correlation between cost of the projects and 1) the relative import tax rate (Malawi import tax rate compared to other countries rate), 2) the portion of import tax from the total NGO project budgets; on the other hand, quality of projects is significantly negatively correlated with 1) administrative payment 2) the value added tax. On the administrative aspect of government intervention- a significant relationship between independent variables and dependent variables is observed. Formulation of sound socio-economic policies, promoting partnership with NGOs and donors on information provision, aid harmonization and coordination, removing development barriers such as corruption and bureaucracies are highly recommended. Moreover, Reliance on the internal source of funding to finance the recurrent and investment budgets and promoting trade and investment are the only ways for sustainable development.