This analysis examines the gaps in health care financing in Malawi and how foregone
taxes could fill these gaps. It begins with an assessment of the disease burden and
government health expenditure. Then it analyses the tax revenues foregone by the
government of Malawi by two main routes:
 Illicit financial flows (IFF) from the country
 Tax incentives.
We find that there are significant financing gaps in the health sector; for example,
government expenditure is United States Dollars (USD) 177 million for 2013/2014 while
projected donor contribution in 2013/2014 is USD 207 million and the total cost for the
minimal health package is USD 535 million. Thus the funding gap between the
government budget for health and the required spending to provide the minimal package
for 2013/2014 is USD 358 million. On the other hand we estimate that almost USD 400
million is lost through IFF and corporate utilization of tax incentives each year.
The revenues foregone plus the current government health spending would be sufficient
to cover the minimal public health package for all Malawians and would help tackle
Malawi’s disease burden. Every effort must be made, including improving transparency
and revising laws, to curtail IFF and moderate tax incentives.