VAT waiver removed on motor vehicle imports for privileged individuals including the President

* The President has guided that we all make our fair contribution towards revenue that government needs at the moment

* The removal of the VAT waiver is a sacrifice and a clear testimony to the commitment to fiscal consolidation for the betterment of all Malawians

By Austin Kananji & Martha Rukunya, MANA

The value added tax (VAT) waiver on duty-free motor vehicle imports which was being enjoyed by some privileged individuals, including the State President, the Vice-President, retired Presidents and Vice-Presidents, Cabinet Ministers, Members of Parliament, senior officials in the Judiciary, senior government officials and senior military officials, has been removed.

Minister of Finance & Economic Affairs, Simplex Chithyola Banda made the announcement in Parliament on Wednesday during presentation of the mid-year review budget statement, while imploring on the MPs to pass the Bill.

He stressed on the collective will from the MPs and the nation at large, saying it is a sacrificial initiative that affects people in the high income bracket to be implemented and manifested.

“I wish to mention that there is need for collective will for us to make our economy recover. As such, the President has guided that we all make our fair contribution towards revenue that government needs at the moment.

“As such, it should be noted that this measure affects people in the high income bracket, such that the removal of the VAT waiver is a sacrifice and a clear testimony to the commitment to fiscal consolidation for the betterment of all Malawians,” he said.

Chithyola Banda reiterated government’s commitment to fiscal discipline while emphasising the importance of shared sacrifices to address the country’s financial challenges.

“This is an austerity budget — it requires all of us, including privileged individuals and officials, to make sacrifices. We must focus on critical investments and tighten our belts for the good of Malawi,” he said.

Government also plans to fully implement electronic excise tax stamps, establish a voluntary tax compliance window for motorcycle operators, and expand electronic payments to reduce leakages in revenue collection.

“These measures reflect our collective resolve to ensure economic recovery and resilience. We all have a role to play in rebuilding our economy for a better tomorrow,” the Minister said.

Meanwhile, Secretary to the Treasury, Betchani Tchereni disclosed that the 2024/2025 budget could have been reduced by up to K10 billion if certain adjustments had been made.

Tchereni was commenting on the reasons behind the rise in budget estimates, despite earlier assurances by President Lazarus Chakwera that this year’s financial plan would be guided by strict austerity measures.

Tchereni attributed the increase to numerous funding requests submitted to the Ministry of Finance by various sectors and stakeholders, which include demands for essential public services, disaster response needs, and economic recovery interventions.

The 2024/2025 budget reflects government’s balancing act between addressing urgent financial needs and maintaining a commitment to fiscal responsibility.—Edited by Maravi Express