Incentives for the transport sector
Transportation is important for the socio-economic development of any country as it facilitates trade, exchange and travel. Malawi offers a number of specific Customs and Excise tax incentives for the transport sector and such incentives cover different modes of transport including road, rail and air transport.
There are a number of incentives for road transport and they cover buses, minibuses and trucks. If you are importing a new bus or a bus used for a period not exceeding five years, you will not pay import duty, import excise and import VAT.
However, you should ensure that the new or used bus has a seating capacity of 40 to 45 persons or more including the driver.
Similarly, if you are importing a new minibus or a minibus used for a period not exceeding five years, you will also not pay import duty, import excise and import VAT.
However, the new or used minibus must have a seating capacity of 11 to 44 persons or more including the driver.
Importers of trucks also stand to benefit from tax incentives in the transport sector. You will not pay import duty and import VAT if you are importing a new truck or a truck which has been used for a period not exceeding 15 years with a 15 tonnage capacity or more.
However, you will pay import excise at five percent but you may have to pay import excise at 20 percent if you are importing a truck which has been used for a period exceeding 15 years.
Incentives in the transport industry are not limited to only road transport. Rail companies also stand to reap huge benefits as they can import rail materials without paying import duty and import VAT.
There are also tax incentives for the aviation industry. If you would like to import an aero plane and other aircraft of unloaded weight exceeding 2,000 kilograms, you will not pay import duty and import VAT.
You will also not pay import duty and import VAT when you import equipment and materials for in-flight use in catering, hygiene or for similar purposes.
However, this is only applicable for international scheduled services. Over the next couple of weeks we will continue to analyze specific Customs and Excise incentives under sectors such as mining, education, health, agriculture, tourism, manufacturing and export processing before moving on to general and specific incentives under Domestic Taxes.
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