Stabilizing Malawi’s Economy: Treasury Sets Record Straight on Tax Rumors
Key Business Points
- The Ministry of Finance has dismissed claims of introducing worldwide taxation, pension income tax, and death benefits tax, reassuring stakeholders that these claims are false and misleading.
- The government has introduced a 0.05 percent bank transfer levy and a 0.05 percent mobile money transfer levy on transactions above K100,000, as well as a one percentage point increase in Value Added Tax from 16.5 percent to 17.5 percent.
- Businesses and stakeholders are advised to verify information through official channels to avoid misinformation and ensure transparent engagement with the government on public finance matters, using the Chichewa phrase "tizithandize kufikirira" or let’s work together to understand the tax policies.
The Ministry of Finance has moved to allay fears among Malawi’s business community by refuting claims that the government plans to introduce new taxes on worldwide income, pension income, and death benefits. In a public notice, the Treasury described these claims as false, misleading, and entirely unfounded, and urged stakeholders to seek clarification on matters relating to public finance through official channels. This move is seen as a boost to business confidence, as it provides clarity on the government’s tax policy and reduces uncertainty.
The clarification comes amid heightened public anxiety over tax policy following the November 2025 mid-year budget review, which introduced a 0.05 percent bank transfer levy and a 0.05 percent mobile money transfer levy on transactions above K100,000. The mid-year review also adjusted the Pay As You Earn structure, raising the zero-rate threshold from K150,000 to K170,000 monthly while removing the 25 percent tax bracket. As the Chichewa phrase "kugwira ntchito" or working together suggests, the government is committed to transparent and inclusive engagement with stakeholders.
The Bankers Association of Malawi has called for clear definitions of the bank transfer levy scope to avoid unintended taxation of all banking activities, warning that ambiguity could result in heavy taxation on ordinary transactions. The Malawi Confederation of Chambers of Commerce and Industry has also urged government to adopt a carefully balanced policy approach to tax measures, cautioning against policies that could harm economic growth. As zinthu zina zikukhuzwa or things are being considered, the government is weighing the impact of its tax policies on the economy.
Consumers Association of Malawi Executive Director John Kapito has warned that the bank transfer levy could derail financial inclusion gains, predicting that consumers might prefer to transact outside the formal banking system. Minister of Finance Joseph Mwanamvekha has defended the bank transfer levy, arguing that it is significantly lower than commercial bank charges and targets wealthy Malawians rather than the poor. With the government’s commitment to transparent and inclusive engagement, businesses and stakeholders can work together to understand the tax policies and grow the economy.
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