How Government vs. MRA Tax Dispute Shapes Malawi’s Business Climate

Key Business Points

• Government will rely more on domestic taxes as donor support declines.
• MRA is exceeding revenue targets and plans to broaden the tax base.
• Digitisation and stricter audits will improve compliance and reduce leakage.

The Ministry of Finance, Economic Planning and Decentralisation has announced that the government will increasingly depend on domestic taxes to finance public spending as external aid diminishes and trade liberalisation advances.

During a visit to the Malawi Revenue Authority offices in Lilongwe, Minister Joseph Mwanamvekha urged tax officials to widen the tax base and improve collections without overburdening existing taxpayers.

He noted that while overall revenue performance is satisfactory, the Lilongwe station could collect more given the concentration of businesses and rental properties in the capital, and that comparison with the Southern Region shows room for improvement.

Mwanamvekha stressed that strengthening domestic revenue mobilisation is essential as Malawi participates in regional and continental free trade arrangements such as SADC, COMESA and the African Continental Free Trade Area, which progressively reduce tariffs. He explained that with these agreements, reliance will shift from customs to domestic taxes, requiring internal capacity to collect more.

The minister recently assured the nation that Malawi will continue receiving donor support despite recent aid cuts by some development partners, speaking at the launch of the Tiyende Limodzi Endowment Fund for the Catholic Archdiocese of Lilongwe. He described fears that declining aid would derail the economy as misplaced.

Reserve Bank of Malawi data show that the government recorded a K349.9 billion fiscal surplus in June 2026, the first monthly surplus in more than a year.

MRA Commissioner General Felix Tambulasi said the authority is already over K20 billion ahead of its cumulative revenue target and expects to outperform its K6.07 trillion annual target. He stated, “We are already ahead of the targets, we believe that we are on the right path, and therefore, come the end of the financial year, we will have exceeded the target.”

Tambulasi added that MRA plans to intensify audits to ensure taxpayers using the self-assessment system correctly declare their income and tax liabilities.

Both officials identified digitisation as central to improving compliance, increasing efficiency and reducing revenue leakage.

MRA faces a K6.2 trillion domestic revenue collection target for the 2026/27 financial year.

Local entrepreneurs note that the expanding Mkango (market) for locally produced goods offers significant growth potential, especially as the government focuses on boosting domestic revenue.

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