Businesses owe council K8 billion – The Times Group

K8 Billion Debt Crisis: A Threat to Malawi’s Economic Growth and Business Stability

Post was last updated: December 27, 2025

Key Business Points

  • Businesses with outstanding tax arrears in Blantyre will be closed down following the expiration of a 21-day ultimatum, as the city council seeks to recover approximately K8 billion in owed city rates.
  • The Blantyre City Council will not tolerate tax evasion through associations with political parties, institutions, or prominent figures, and will expose those attempting to use such connections to avoid paying city rates.
  • Effective service provision is hindered by the lack of city rate payments, resulting in damaged road infrastructure, inadequate streetlights, and public structures in need of rehabilitation, which the council aims to address through improved tax collection.

The Blantyre City Council has announced its intention to close down businesses with outstanding tax arrears, following the expiration of a 21-day ultimatum. This decision, announced by Mayor Isaac Jomo Osman, aims to recover approximately K8 billion owed by businesses, which is essential for the effective provision of city services. Osman emphasized that the council is a service provider and requires residents to contribute through the payment of city rates, known as maluŵiro, in Chichewa.

The mayor expressed concern over individuals attempting to evade taxes by associating with political parties, institutions, or prominent figures. He assured that his administration would not tolerate such behavior and would expose anyone attempting to use these connections to avoid paying city rates. This move is seen as a step towards improving the business environment in Blantyre, where ukweza kwa maluŵiro, or tax evasion, has been a persistent issue.

Economist Mavin Banda commended the mayor’s approach, noting that corruption and politics have long hampered city rate collections. Banda stated that noncompliance with tax measures comes from either businesses deliberately choosing not to pay or an unfriendly business environment, and that both factors are present in Blantyre. He encouraged the council to implement mechanisms to address noncompliance on the ground, ensuring that businesses pay their fair share of maluŵiro.

The council’s efforts to improve tax collection are part of a broader vision to make Blantyre the cleanest and safest city in Africa. Osman has outlined plans to achieve this vision, including the removal of street children, street vending, and Kabaza operations in the central business zone. By addressing the issue of tax evasion and improving service provision, the council aims to create a more conducive business environment in Blantyre, which will attract investment and promote economic growth. As the council moves forward with its plans, businesses in Blantyre must be prepared to pay their outstanding taxes or face closure, ensuring that the city can provide essential services to its residents.

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Vanessa Banda
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