Investors question capital gains tax implementation – The Times Group

Revitalizing Malawi’s Economy: Navigating Capital Gains Tax Implications for Business Growth

Post was last updated: January 8, 2026

Key Business Points

  • Investors on the Malawi Stock Exchange (MSE) are seeking clarity on the implementation of the capital gains tax, which is set to be introduced in November 2025, with concerns over potential retrospective taxation of gains made before its introduction.
  • The tax may deter investors, with a 30 percent tax rate for locally registered companies and 35 percent for foreign companies, making Malawi a less competitive destination for stock investments compared to regional peers.
  • Industry stakeholders, including the Minority Shareholders Association of Listed Companies (Misalico) and MSE Chief Executive Officer John Kamanga, are engaging with the Finance Minister to address concerns and prevent erosion of investor confidence.

The introduction of the capital gains tax on the Malawi Stock Exchange (MSE) has sent shockwaves through the investment community, with many osowa zakumudzi (business owners) and investors demanding clarity on how the tax will be implemented. The tax, which was gazetted in November 2025, imposes a 30 percent tax rate on profits realized from sales of shares on the stock market for locally registered companies, and 35 percent for foreign companies. This has raised concerns among investors, who are unsure about how the tax will be calculated, particularly with regards to gains made before the tax was introduced.

According to Misalico General Secretary Frank Harawa, investors are kuluma kwa chisoni (speaking with one voice) in calling for clarity on the tax, citing concerns that retrospective taxation of gains made before the tax was introduced would be unfair and kutengera nthaka (scare away) investors. The MSE, which recorded a 237.9 percent capital gain in 2025, has slowed down towards the end of the year, with investors citing the capital gains tax as a major factor.

Industry stakeholders, including Misalico and MSE Chief Executive Officer John Kamanga, are engaging with the Finance Minister to address these concerns and prevent erosion of investor confidence. Kamanga has argued that the tax would dza kulowa mphamvu (weaken the strength) of the capital market, which needs to grow and contribute to economic transformation. As one investor, Benedicto Nkhoma, noted, ndalama zochokera (tax policy) should aim to stimulate confidence, encourage investment, and deepen markets, rather than simply collecting revenue.

Despite these concerns, individual counters on the MSE posted strong performances for the year, with some mawonekedwe (listed companies) recording significant gains. However, the introduction of the capital gains tax has positioned Malawi as a less competitive destination for stock investments compared to regional peers, where similar gains remain tax-free or attract lower rates. As the business community continues to kuthandiza (monitor) the situation, it remains to be seen how the government will address these concerns and balance the need for revenue collection with the need to stimulate economic growth and attract investment.

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Vanessa Banda
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