IDEAS home Printed from
   My bibliography  Save this paper

Counteracting Tax Evasion In Malawi: An Analysis Of The Methods And A Quest For Improvement


  • Chiumya, Chiza


Tax Evasion is one of the major problems that Tax Administrations face the world over. This is however more pronounced in Developing countries. Tax Evasion is defined in this paper as the act of illegally paying less taxes (or not paying at all) than the amount legally required by the tax law. This is in contrast to Tax Avoidance which contains some elements of legality as it is defined as the reduction of tax liability by practices that take full advantage of the loop holes in the tax law. There are several reasons that have been cited as the major causes of Tax Evasion, especially in developing countries. Among such reasons are high tax rates that increase tax burdens, inadequate and weak tax law legislations which are coupled by lower levels of tax law enforcement, general dissatisfactions with the public service provisions and, the presence and extent of the parallel economy in these countries. This paper focuses on analyzing the methods that Malawi employs in counteracting Tax Evasion and how they can be improved. At the core of the paper is the fact that Tax Evasion can be controlled by looking at the Tax law and also the various administrative measures that go along with enforcing it. It further singles out and recommends reviews in the Tax Law such as the enhancement of penalties and the broadening of transactions that require Tax Clearance Certificates, such as the tendering process. The paper also recommends a review in the staff capacity and its abilities, Assessment system, Incentive scheme and also tackling of the parallel economy in a bid to bring it into the taxable fold through the analyzing of Withholding Tax and Import and Export records.

Suggested Citation

  • Chiumya, Chiza, 2006. "Counteracting Tax Evasion In Malawi: An Analysis Of The Methods And A Quest For Improvement," MPRA Paper 9892, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:9892

    Download full text from publisher

    File URL:
    File Function: original version
    Download Restriction: no

    References listed on IDEAS

    1. Fethi Ogunc & Gokhan Yilmaz, 2000. "Estimating The Underground Economy In Turkey," Discussion Papers 0004, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.
    2. Fishlow, Albert & Friedman, Jorge, 1994. "Tax evasion, inflation and stabilization," Journal of Development Economics, Elsevier, vol. 43(1), pages 105-123, February.
    3. Friedrich Schneider & Dominik Enste, 1999. "Shadow Economies Around the World - Size, Causes, and Consequences," CESifo Working Paper Series 196, CESifo Group Munich.
    4. Richard M. Bird & Jorge Martinez-Vazquez & Benno Torgler, 2014. "Societal Institutions and Tax Effort in Developing Countries," Annals of Economics and Finance, Society for AEF, vol. 15(1), pages 301-351, May.
    5. Ahmad,Etisham & Stern,Nicholas, 1991. "The Theory and Practice of Tax Reform in Developing Countries," Cambridge Books, Cambridge University Press, number 9780521265638, April.
    6. Allingham, Michael G. & Sandmo, Agnar, 1972. "Income tax evasion: a theoretical analysis," Journal of Public Economics, Elsevier, vol. 1(3-4), pages 323-338, November.
    7. Konstantine Pashev, 2005. "Tax Compliance of Small Business in Transition Economies: Lessons from Bulgaria (2005)," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0510, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    Full references (including those not matched with items on IDEAS)

    More about this item


    Tax Evasion; Tax Revenue; Tax Laws;

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:9892. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joachim Winter). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.