The UK’s tax treaty with Malawi is outdated and unfair:
it’s time Malawi got a better deal
We are working with ActionAid to call for this colonial-era treaty to be completely renegotiated, to be made fairer for Malawi and fit for the 21st century.
STOP PRESS: Latest update on the campaign
We're delighted to report that progress with this campaign looks very encouraging. We understand the UK Government is doing all it can now to update this treaty and is in active dialogue with the Government of Malawi.
David Gauke MP, Financial Secretary (HM Treasury) said in Parliament that "The UK has a large number of tax treaties which includes treaties with developing countries. Some of those treaties require updating and HMRC officials actively seek engagement with developing countries to that end." Citing Malawi as an example, Mr Gauke said negotiations were "close to conclusion".
Justine Greening MP, Secretary of State for International Development, said in Parliament "negotiations are going well" with the new UK-Malawi tax treaty, and went on to say "…it is time the international tax system worked more effectively. These negotiations are going well. They sit alongside other work the UK is doing, such as on beneficial ownership and tax transparency."
The Government of Malawi has said: "These discussions are progressing very well, and the governments of the two countries are committed to the conclusion of a fair and equitable revised agreement."
We applaud the commitment from both governments to this treaty re-negotiation and we eagerly await the outcome of this process.
Why is the tax treaty outdated?
The UK’s tax treaty with Malawi, which sets out how money moving between the countries is taxed, was originally signed in 1955 while Malawi (then Nyasaland) was under UK colonial rule.
Malawi is now one of the poorest countries in the world, with its entire national budget roughly equivalent to the budget of the London Borough of Hackney.
The UK-Malawi tax treaty is long out of date: it was signed nine years before Malawi gained independence between the UK Government and the UK Government’s appointed Governor of Nyasaland, Geoffrey Francis Taylor Colby.
The UK-Malawi tax treaty unfairly favours the UK and limits the ability of the Government of Malawi to tax UK firms operating there.
As the Malawi Kwacha spirals, inflation soars and food insecurity hits 2.8 million Malawians, it is more important than ever that the Government of Malawi can raise tax revenue for the essential functions of State – supplying hospitals, paying teachers, supporting food security.
How do I get involved?
You can get involved by:
Representing the 94,000 Scots currently working in partnership with Malawi, across our 800+ members, we ask every Scottish MP to support the call to update the UK-Malawi tax treaty.
Our members are spread across all 59 Scottish constituencies, so we are asking all our members to contact their local MP and ask them to join the campaign.
3. Tweet your support using #MakeTaxFair
Want to know more?
Take a look at ActionAid's website for more information on the Make Tax Fair campaign.