Malawi offers a wide range of tax incentives with the aim of encouraging development, enhancing output, earning and saving foreign exchange and expanding employment opportunities. 

These tax incentives are aimed at enabling business establishments to grow and expand their operations thereby contributing to the overall social-economic development of Malawi.

Before the end of 2016, we highlighted some general and specific Customs and Excise tax incentives and now we would like to explain how you can take advantage of general and specific domestic tax incentives.

Domestic Taxes are taxes collected from income generated within the geographical confines of a country. In Malawi, such taxes include Income Tax, Value Added Tax (VAT), Fringe Benefit Tax (FBT), Non-Resident Tax (NRT), Withholding Tax on Dividends and Domestic Excise.  Domestic Tax Incentives in Malawi are mainly in form of tax exemptions against the levied taxes.

There are General and Specific Domestic Tax Incentives.  General Domestic Tax Incentives are accessible by every taxpayer operating as a business person or business entity. There are four General Domestic Tax Incentives in Malawi and they highlight how businesses can carry forward their losses, how they can benefit from capital allowances and how they can claim their expenditure on corporate social activities.     

Conversely, Specific Domestic Tax Incentives are sector specific and are accessible by a taxpayer operating as a business person or business entity in that particular sector. Specific Domestic Tax Incentives in Malawi cover four sectors namely export, mining, agriculture and manufacturing.

Over the next couples of weeks, we will explain in detail each of the General Domestic Tax Incentives to allow taxpayers operating as a business person or business entity to appreciate how they can benefit.

Similarly, we will also take you through the Specific Domestic Tax Incentives to allow taxpayers operating as a business person or business entity within the export, mining, agriculture and manufacturing sectors to benefit as well. Please visit our website
www.mra.mw/tax-update to read other articles we have published. We wish you a Happy and Prosperous New Year.

Feedback: tax@mra.mw, 0888 958 220, 0999 551 634