Mincrofinance Institutions (MFI) Should not Be Taxed
Charles Tanyi, Student (Other), Cameroon
In Cameroon they are taxed. Indeed, it is the poor who are being taxed, because the taxes are incurred by clients when they pay for the service the MFI provides to them.
This is the paradox. MFIs shoud actually be alleviating poverty. Unfortunately, the loans they give to the poor are heavily taxed and the very purpose of the loan is defeated.
No doubt, MFIs provide loans to the poor which they otherwise would not get from classical banks. Yet, the expected results are difficult to obtain because in the final analyses, the loans are more expensive than those granted by banks.
I hold therefore that MFIs should not be taxed if they are to meet a major objective which is poverty alleviation for the masses.