Malawi Revenue Authority (MRA) : CLARIFICATION ON TAX INCENTIVES ON MOTOR VEHICLES

The Malawi Revenue Authority (MRA) would like to clarify the misconception regarding tax incentives on motor vehicles created by an article published on the Business Page of “The Nation” Newspaper of 28th August 2015.



The news article titled ‘MRA Taken to Task on Tax Incentives’ made reference to the workshop that the Malawi Revenue Authority had with the business community on the new tax measures that were passed by Parliament during the last Budget Session in May 2015. The article painted an incorrect picture that Government has only given tax incentives on expensive motor vehicles leaving out small vehicles imported by Small and Medium Enterprises (SMEs).

First, the Malawi Revenue Authority wishes to inform the public that the meetings the Authority conducted in Blantyre, Lilongwe and Mzuzu were not about tax incentives. The meetings were aimed at informing taxpayers about the changes made in the Taxation Act, Value Added Tax and Customs and Excise Act.

Secondly, MRA wishes to inform the General Public that the new tax measures on Customs provide duty relief or tax incentives on all types of motor vehicles including those whose engine size is below 3000 cc.

One such measure is the removal of import duties on passenger carrying motor vehicles manufactured in South Africa. During the recent budget sitting of Parliament, Government removed import duties on motor vehicles manufactured and imported from RSA provided they are accompanied by Certificates of Origin certified by the South African Revenue Service (SARS). This tax measure applies to all types of motor vehicles irrespective of the cylinder capacity (cc) or make and/or their age. In this regard, SMEs and all importers in Malawi can benefit from this tax measure.

In addition to the reduction of import duties, Government also reduced the rate of Excise tax on passenger carrying motor vehicles of a cylinder capacity of 3000 cc and above from 110% to 80% under Customs tariff heading 87.03. These vehicles are those exceeding 12 years of age. For new passenger carrying vehicles and those of up to 8 years of age of engine capacity 3000 cc and above, the Excise tax was reduced from 55% to 40%. This is regardless of the origin of the vehicle. However, if such vehicles were manufactured in South Africa, the import duties would also be “Free”. Resultantly, importers in Malawi would end up now paying less.

For passenger vehicles of less than 3000 cc, the Excise rate is already less. For example, for new passenger carrying vehicles and those of up to 8 years of age, of engine capacity less than 1500cc, the Excise rate is zero since 2012. Hence, SMEs and local motor vehicle dealers are already benefiting from such tax incentives on motor vehicles including the removal of import duty on motor vehicles from RSA introduced in May 2015.

The Malawi Revenue Authority therefore, wishes to assure the public that the current tax policies as formulated by Government are intended to promote the growth of Malawian businesses and the trading community including Small and Medium Enterprises (SMEs)

For further information, the general public can get in touch with Edwin Starch on 0888 952 139 or Steve Kapoloma on 0888 986 200


Raphael Kamoto
COMMISSIONER GENERAL