Govt suspends implementation of specific motor vehicle duty rates

The Minister of Finance and Economic Affairs, Sosten Gwengwe, has directed the suspension of the implementation of the newly introduced specific duty rates system for clearance of second-hand motor vehicles.

The system, which was published in the Customs and Excise (Tariffs) (Amendment) (No.4) Order of 2023, attraction an outcry from second-hand motor vehicle traders and the Minibus Owners Association of Malawi (MOAM).

Finance Minister Sosten Gwengwe

The outcry prompted Gwengwe to invite representatives of the traders and MOAM to a meeting on 7th July 2023 to discuss how they parties can resolve the matter.

In a statement issued on Friday, Secretary to the Treasury, Dr. MacDonald Mwale, observed that the policy, though a welcome development as it will bring fairness, predictability, and reduce customs dispute, had a number of errors, including high duty rates than what has been obtaining under the old system.

“The minister has further directed that consultations between the Malawi Revenue Authority, the Second-hand Motor Vehicle Traders, MOAM, and other stakeholders, should continue until a more accurate schedule of the specific duty rates for each second-hand motor vehicle is produced. To ensure smooth clearance of secondhand motor vehicles and the introduction of a more accurate schedule of specific duty rates for secondhand motor vehicles,” said Mwale in the statement.

He said Gwengwe had therefore directed that the Malawi Revenue Authority should continue to clear second-hand motor vehicles using the ad valorem method until the revised schedule is agreed upon and published in the Gazette; and that all notices from the Malawi Revenue Authority, regarding the implementation of the specific duty rates, are withdrawn forthwith.

“Once all the processes are finalized and the new schedule is agreed upon by all stakeholders, a notice will be published in the Government Gazette notifying the general public of the revised specific duty rates and the commencement date for the new system of clearing secondhand motor vehicles using specific duty rates will be announced. The Ministry appreciates the cordial and candid discussion that it has been having with various stakeholders, including the Second-hand Motor Vehicle Traders and MOAM on this issue,” Mwale narrates in the statement.

Meanwhile, the ministry has appealed to Malawians, especially secondhand motor vehicle importers and the business community, to exercise patience as this exercise is being undertaken.

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