Tax Update
Incentives for the tourism sector

Incentives for the tourism sector

Tourism is Malawi’s third foreign exchange earner after tobacco and tea and the tourism industry contributes significantly both to the level of Gross Domestic Product (GDP) and to the country’s economic growth. Tourism is often considered a catalyst for economic and social development because it tends to have a large trickle-down effect in terms of poverty alleviation, boosting employment creation and small business entrepreneurship.

The Malawi Government is now diversifying economic activities from agriculture, developing and promoting tourism as one of the major economic activities as it offers an alternative source of income. Investors intending to invest in the tourism sector in Malawi can therefore enjoy a number of Customs and Excise incentives and they include free import duty, free import excise and free VAT. 

Investors in the tourism industry will not pay import duty, import excise and VAT on the importation of a number of goods. Such goods include; Glass, China porcelain earthenware and stone articles of table ware, enamel and hollowware for table use, electro plated nickel – silver and pated ware, knives, forks spoons and similar articles for cutlery;  Industry catering equipment, motor boats scuba diving, jet skis, kayaks, wind surfers, pedals, air conditioners, generators, gym equipment, message equipment, industrial washing machines, bar fridges, sauna, hot steam baths; Off-road game/scenery viewing motor vehicles specially designed for safari purposes; And three goods carrying vehicles, except used motor vehicles imported every five years.  However, these items should be marked, linen etched, stamped or in any manner marked with the name of the hotel to benefit from the exemption.  

Furthermore, hotels, lodges and inns with 50 rooms and above can also benefit from duty exemptions which are available on furniture and furnishings and two new passenger carrying motor vehicles except used motor vehicles imported every five years, for instance shuttle buses.  

Investors in the tourism sector will also not pay import duty, import excise and VAT if they import materials and equipment for the establishment of a conference centre with a 200 seating capacity. 

Such materials and equipment include public address system, video conferencing equipment, television screens, amplifiers, LCD equipment and industrial catering and bar equipment. However, the materials or equipment should be indelibly engraved, etched, stamped or in any other manner marked with the name of the hotel, lodge or inn. Furthermore, the importing entity should also be operating a hotel or lodge in order for the items to benefit from the exemption.

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