The Malawi Government announced new tax measures for Customs & Excise and they became effective on the midnight of 12 June 2020. The new tax measures relate to Import duty, Excise duty and various tax incentives under Customs Procedure Codes (CPCs).
Government has removed import duty on off-highway dump trucks for road construction, reduced Excise duty rate on opaque beer from 40% to 30% and amended the Second Schedule to include excisable services in the definition of “value of excise ad valorem”. Furthermore, Government has clarified the base for the 10 percent Excise tax applicable to betting, gambling and lottery services, which is the amount wagered or staked and the value of the lottery ticket.
As far as tax incentives are concerned, Government has amended CPCs for Cabinet Ministers and MPs to allow them to dispose their motor vehicles duty free if they are disposed of after a period of 5 years. It has also introduced CPCs to allow duty free importation of TV and radio broadcasting equipment and one motor vehicle for a Paramount Chief in every 5 years. It will also allow religious institutions, top-flight football teams and seeded netball teams for national tournaments to import duty-free one bus, with a seating capacity of 26 persons or more including the driver, in every 5 years.
Furthermore, Government has introduced 10% surcharge on imported exercise books, textbooks, blankets, stick matches, dressed poultry and eggs. It has also introduced Carbon Tax on petrol and diesel as part of the domestic pump price at MK5/litre. Administrative measures include adjustment of the value addition threshold for qualification into the Industrial Rebate Scheme (IRS) from 20% to 35%.
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