Telecommunication, Custom Duty Fines, Customs Form 12 Goes Up To Support 2015/2016 Budget

Goodall Gondwe Finance Minister 

Minister of Finance presented 2015/2016 budget estimates which largely rely on perfomance on domestic revenue and off-budgetary support from donors.

Suggestively, such a budget shall see Malawians to dig more in their pocket when accessing some services due to tax regime that will concentrate on broadening the tax base in order to generate more domestic resources as well improving administrative efficiency, encouraging tax compliance. 

Likely, in this situation government has been left with no other choice but to raise custom duty on some potential tax revenue generators.

So, get prepared for the new cost of SMS, Internet, Customs and Excise form 12,  Customs Procedure Code for Specialized Broadcasting Equipment for Direct use in Television and Radio Stations (CPC 480) and Customs and Excise Duty Fines though some rates have been reduced.

Minister of Finance Goodall Gondwe when announcing the new tax measures indicated that the amendments were made following various insightful and constructive proposals received during this year’s pre-budget consultations, though a number of them may be considered for future budgets. 

"Mr. Speaker, Sir, the Customs and Excise tax measures to be announced today will become effective from midnight tonight, whereas the Value Added tax (VAt) and Income tax measures will be effective on 1st July 2015, once the relevant bills are passed by this House." He announced 

Increased Customs And Excise Duty Measures

Hon. Gondwe announced that, following the tremendous uptake of the telecommunication services in Malawi, and in order to expand the tax base togenerate resources for this budget, 10% excise duty will be levied on text messaging and all data transfers including internet and similar services. He noted that Government removed customs duties on mobile phones in order to improve access to mobile telecommunication. And went further to remove customs duty on solar cellular telephone chargers. 

Government has removed henceforth, Customs Procedure Code for Specialized Broadcasting Equipment for Direct use in Television and Radio Stations (CPC 480). Such equipments were imported free of Customs duties, VAt and Excise duty, in order to improve information dissemination in Malawi. 

The finance Minister contented that objectives of removing customs duties have been achieved as there is now a proliferation of television and radio stations in Malawi, creating competition in the industry which has given Malawians options to choose from.

Threshold Value for Entry of Goods on Customs Form 12 has been increased from K100,000.00 to K500,000.00 so as to reduce the time spent at the port of entry for small and medium business people or travellers who import goods from neighbouring countries, and to support the ‘Ease of doing Business’ initiatives that the Government is undertaking.

Customs and Excise Duty Fines has been revised upwardsin order to provide for meaningful cost sharing and recover the value eroded by inflation. Now, the minimum fine has gone up from K10, 000.00 to K100,000.00, as the minimum fine in the Customs and Excise Act has been eroded with inflation and does not cover the cost of enforcing compliance. 

Reduced Rates in Excise Duty 

Excise Duty on some Imported Vehicles Government has reduced excise duty rates on motor vehicles under the Customs and Excise tariff Heading 87.03 with an engine capacity exceeding 3,000cc in order to encourage tax compliance.

Excise Duty on Dry Cell Batteries that operate light torches and radios used by most Malawians, especially in the rural areas has been reduced from 30 percent to 10 percent.

On Regional Trade Agreements, Malawi is to migrate to Customs and Excise (Tariffs) Order to COMESA Common Tariffs Nomenclature (CTN) and this will be published in the Government Gazette.

The budget statement furhter indicates that there shall be Taxation Act Amendments including on Tax Policy and Administrative Measures, Amendments of the Malawi Revenue Authority Act, and Amendments of the Value Added Tax Act.

Reed full budget statement Read or Download