Tax Update
Customs and Excise tax incentives

Customs and Excise tax incentives

As pointed out in this column last week, we will be analyzing various tax incentives under both Customs and Excise and Domestic Taxes. We will start our analysis by looking at incentives under Customs and Excise before moving on to Domestic Taxes. As highlighted in the introductory column last week, both Customs and Excise and Domestic Taxes have general and specific incentives.  

Malawi’s general Customs & Excise Tax Incentives are in the form of duty exemptions on machinery targeting different sectors of the economy. These exemptions are offered in four exemption approaches as follows; Import duty and import VAT exemption on importation of most machinery; Import duty exemption while VAT remains payable at 16.5% on importation of specific types of machinery; Import duty and import VAT exemption on importation of special purpose motor vehicles, for instance concrete mixer lorry and mobile drilling vehicles, other than those principally designed for transport of persons or goods; And solar products are import duty free while VAT remains payable at 16.5 percent. 

Specific Customs & Excise Tax Incentives in Malawi cover ten sectors and these are Construction, Energy, Tourism, Agriculture, Transport, Mining, Education, Health, Manufacturing and Export Processing. If you are in the Construction Sector you could benefit from importing Crane Lorries, Concrete Mixer Lorries, Mobile Drilling Derricks and Track Laying Tractors without paying duty and VAT. 
There are also attractive specific incentives in the Energy sector and you could reap huge benefits through electricity generation and distribution. There is no duty for importing electricity generation equipment such as fuses, transformers, sling, ring main unit, insulators, galle chain equipment, conductors, surge arrestors, column duplex, AAC/PVC and electricity supply meters but you will pay only VAT at 16.5 percent. 

Furthermore, you will not pay duty for importing energy saver bulbs, solar batteries, solar battery chargers, energy lamps, generators and inverters but you will pay only VAT at 16.5 percent. 

Over the next few weeks we will be looking at other specific Customs and Excise incentives under different sectors. If you missed last week’s introductory column, you can log on to our website www.mra.mw/Tax-Update to read about Tax Incentives and other interesting articles. 

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