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Domestic Excise Tax

Domestic Excise Tax

Last Updated: 06 April, 2016 - Print

There are two components of Excise Tax. There is Import Excise, which is levied on certain importations and is administered by the Customs Division. There is also Domestic Excise, which is levied on certain locally manufactured products and services and is administered by the Domestic Taxes Division.

 

Examples of such locally manufactured products include spirits, beer, airtime and cigarettes. It is administered under the Customs and Excise Act, Section 63 to 81 while offences and penalties are stipulated under Sections 140 and 143b respectively of the same Customs and Excise Act. Excise tax rates are in the Customs and Excise Tariff Order under column 10.

 

A taxpayer is required by law to complete entry of premises EX37 forms in triplicate and must be accompanied by plans of the premises and plant. This application can be renewed or a fresh application must be made whenever there is a transfer or extension of premises or plant.

 

A license to manufacture is also issued by the Commissioner General upon meeting the set conditions as per the provisions of the Customs and Excise Act. Again a bond on Form 123 should be provided by either a bank or an insurance company established in Malawi. The amount of guarantee will depend on the size of production.

 

The amount of Domestic Excise to be paid is determined by multiplying the cost of production of each product by its rate as outlined under column 10 of the Customs and Excise Tariff Order. Different products attract different rates as tabulated below;

 

Item

Rate

Spirits

250 percent of the cost of production

Opaque beer

30 percent of the cost of production

Clear beer

90 percent of the cost of production

Bottled water

10 percent of the cost of production

Air time

10 percent of the sales

Gaming

10 percent of the sales

Audio tapes

20 percent of the cost of production

Cigarettes

30 USD per 1,000 cigarettes

 

Domestic Excise is payable by the 20th of the following month in which it was charged. Failure to comply with the Excise Tax Law attracts penalties stipulated under Sections 140 and 143b of the Customs and Excise Act.

Calculators and services

Terms and conditions apply

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