Malawi hikes tax on internet, duty on SMS: Goodall says local resources to finance 2015/16 budget
Malawi Finance, Economic Planning and Development Minister Goodall Gondwe on Friday said the 2015/16 budget which has no budgetary support from donors will be financed by local resources and announced new tax measures including a 10 percent excise duty to be levied on phone text messaging and all data transfers, including internet and similar services.
“We have to generate adequate local resources to finance our activities,” said Gondwe.
He said the tax on internet has been put following the “tremendous uptake” of the telecommunication services in Malawi and in order to expand the tax base “to generate resources” for the national budget.
Gondwe also announced that government has determined that the excise duty rates for motor vehicles with engine capacity exceeding 3 000cc “are too high” and has been reduced which is good news to the second hand motor vehicle dealers and car importers.
He said to encourage tax compliance; government has decided to reduce excised duty rates on motor vehicles,
“For new motor vehicles up to 8 years old, excise duty will be reduced from 55 percent to 40 percent; for motor vehicles aged above 8 years old up to 12 years, excise duty will be reduced from 88 percent to 60 percent; and for motor vehicles aged above 12 years old, excise duty will be reduced from 110 percent to 80 percent,” said the Finance Minister.
He announced removing tax on radio and television equipment “in order to improve information dissemination in Malawi.”
Excise duty on dry cell batteries that operate light torches and radios used by most Malawians, especially rural dwellers, has also been reduced from 30 percent to 10 percent.
Another tax measure announced by Gondwe was about small-scale cross border traders which will see the threshold value for entry of goods on Customs and Excise form 12 being increased from K100 000 to K500 000.
This, Gondwe said, will likely reduce the time spent at the port of entry for small and medium business people or travellers who import goods from our neighbouring countries, and is expected to support the ‘ease the cost of doing business’ initiative that Malawi government is undertaking.
Government has also revised the minimum fine in the Customs and Excise Act from K10 000 to K100 000 on importers of goods and services.
Gondwe told the House that there are several Taxation Act amendments which government is proposing.
“Exemption from capital gains tax for the transfer of property from an individual into a trust; Clarity on charging of interest. In this regard, MRA will now adopt the bank lending rate plus 5 percent.”
Gondwe said the tax body will levy a penalty if unremitted non-resident tax at 20 percent of the amount unremitted.
He said government wants an amendment to provide “clarity” on what constitutes re-organisation and qualified re-organisation in the taxation ac.
Gondwe also proposes an amendment to provide for the charging of income tax on deemed interest earned on interest-free loans and that the foregone income will be taxable in the hands of the lender.
The Finance Minister said the Taxation Act amendments will be presented to parliament through a bill.
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Zokomera achuma zimenezo!,kambani zoti wakumudzi athandizidwe,kod bwanji mwaiwala malonjezano athu aja?,tinapangana kuti muzizakamba zopanda mutuzo?,koma kuba basi!,osaiwalatu onse osakaza chuma chaboma azifa imfa yowawa kwambiri,(mateyu 16 v24)
Reduce that 30% tax on the excess of 20,000 0n our salaries or increase the tax free band to 50,0000.,zinazo we r not going to benefit anything.
Goodell be serious, u mean u have reduced taxi on used cars and instead u hav introduced taxi on fone call, sms, facebook, whatsapp, tweeter, 2go, mixt nd so on…or.iam getting u wrong?
komanso m’maliro osayiwala kutolera ndithu
Malawi continues to retrogress while other countries like Rwanda are busy providing free browsing access to all. Nation of Zombies Malawi. What happened to all those DPP and Pitala lies about a good life for Malawians during campaigns? Muziona a Malawi. Ili ndi boma la azinkhalamba osowa ideas and vision apart from stealing our tax monies.
We are loosers in every way. The handful shall make money and the rest will suffer. Stupid psrliament
Osatenga tax mumatchalitchi ndi zikwati bwa? Tc
Mwafika nanzo pa umbva izi,mukatero muziba kukangula mangalimoto undula kumanga manyumba ife kumangotiyamwa basi.
kuchepetsa tax on cars and tv eqpmt for the rich and introducing tax on smss,ndi kuchepetsa subsidy? kufinya wakumudzidi. paja anaika msonkho on offals at some point mmalo moika on sausages. zakumalawi.
Malawi ananokola nthawi ya Bakili beyond repair. Bingu tried but was lucky with the debt relief. Peter is here for a state funeral. There cannot be patriotism for someone who left the country in 1960 only to returned when his brother promised him the presidency. He came back to die.
chibwana chimenechi ine sinamvepo kut tax mpaka sms internet kkkkkk zilikuno kwathu kaya koma zoona kuchosa tax wa radio equipment.ndikuika ku internet kkkkkkk
I’m going back to South Africa. Even with xenophobia and all it is still better than Nyasaland. This stupid DPP is squeezing the poor even more, I can’t take it. The one month I have been back is enough to realize that South Africa is still a better alternative……. So long my county men.
We will now all have cars with no where to go. This administration’s priorities are out of wack. May be we should start with infrastructure first……. Just may be that would make sense.
Sms, phones and Internet have become basic commodities for Malawi nOw. People have to communicate and gather gather information. But they are taxing that because it is easier to collect. Still not fair.
kutha kwa nfundo uku. awa nde timati madzelamadzela, nsece za ndondomeko. koma civwimbo ici culuganiza????????????????????????????
complete lunacy this is stupid a country with the poorest economy but yet a very expensive one Mr Gondwe resign this is total foolishness u go home with heavy pockets lacking nothing in you life n u impose such stupid taxes. Go jump off a cliff you aristocratic lunatic.
Bingu Anali dolo pa yekha coz culd engineer Goodall or Ken on how good budget is supposed to have for the common
A government that cannot win donor confidence in an impoverished country like Malawi is good for nothing. This president and his party need to be impeached. They are failing to sort out cash gate which is key to unlocking donor aid. DPP is stinking to the core
I still wonder y Malawi still have retro economists running the affairs of this country.They don’t even know what www stands for!
zochitika ku malawi ndi boma munthalika
Just to assist on innovative ways of bridging the financing gap. The following could be useful. Come to my house in Kameza for clarification.
1 issue sovereign or diaspora bonds. This requires country’s credit rating. Malawi is far from it.
2 use pension or insurance funds. These funds are lying idle.
3 try family wealth offices. Go middle East.
4 check on privatisation funds. What happened ?
5 use telecommunication and fuel levy funds accountably. Go to Ethiopia and see how telecommunication funds are used. MACRA is sitting on unaccounted tonnes of money.
6 create a fund for remittances.
Good day.
Ma politician nonse mutengerepo phunziro ma donors achita bwino kusiya kuthandiza boma la malawi ndi umbava wanuwo this country is full of crooks plz you donors where ever you are dont waste your money to help malawi wait until they learn alesson tsono ndiye zikhala bwino chifukwa misonkhoyi azidula aliyense ndiye inu amene mmasapota zipani zambava kuti zikupwetekeni simuzavoteranso mbava
A kind advice and workings to Mr. Gondwe. Instead of raising on the sms and internet he should have introduced tax on chickens and eggs of 10% tax here is the working
One million chickens a day @
Mk 600 each = mk 600 million
10% tax is mk60 million a day on chickens and
On eggs approximately
Mk25 million tax a day so in total
Mk85 million a day by 30 days by
12 months = Mk 300 billion a year so almost 40% is recovered from two items only.
Nd chickens n eggs consumed is by middle class so s mere 10% want make a great difference.
old men @ work pressing a big heel @ their own children
Mbuzi za DPP. President ndi wokalamba uyu. His children are not Malawians. Siyilani mwana Chilima. Goodall nkhalamba and his family too is not in Malawi. Chaponda ndi nkhalamba and has Zambian connections.
A sad day for Malawi! The cost of internet was already over three times higher in Malawi than in Europe. And this happened at the time when the rural masses were just beginning to access the internet via mobile devices. This move will choke internet penetration, discourage development, and worsen Malawi’s gain from the information highway. Why should a professor Peter allow this? Gondwe’s salvage value will hurt Malawi!
So easy to criticize without giving alternative solutions. Looks like we have economists who got F-grades in Maths. By the way, do they know how much sending an sms costs. Do they also know how minimal a 10% increase will translate into an sms cost? Overall do they have a clue on how much the govt will amass from those small increases to finance our budget? Kulongolora musakudziwa masamu kukuyalutsani.
Mbuzi iwe, how many alternative solutions do you want? In these comments patriotic Malawians are offering alternative solutions to how government can raise revenue on things that cannot retard progress. The message is a simple one: Why choke things that may assist growth of the economy, education and communication when even higher revenue can be raised on luxuries such as beer, cigarettes etc?
There could still be one good thing from increased internet charges: DPP fools like yourself may not find it so easy to access the internet to post your filth…
We shouldn’t forget that this is the same party that attempted to introduce tax on offals! A government that introduces higher, instead of lower taxes on internet charges in 2015 is just plain crazy…but then thats what we get when we let people who should be at Newlands run our affairs
Kameza # 33 I like your Comment
all this Is unnecessary . We all Know that Amwenye are the reason for tax problem In Malawi. As long as they are committing tax evasion shit won’t change . Koma as usual We want to look the other way and pretend that heavier taxes are the solution
Stop stealing imwe mwavimidala vinkhungu imwe! Soni zimukolaninge! Muna sanje kuti bana banjoyenge? Ndise tilikumuchekuzgani! Vichekulu vauchindere ivi! Fwaninge lubiro tifwaseko!
It is indeed that this is a fool goverment including mr gondwe himself
Stealing in de daylight. DPP BOMA!
they promised to increase salaries for the lower and the lowest grade but sizikumvekako or pang’ono. ukanama sikuchedwa kucha. komanso wakhate sitimunamiza nsapato. tikachita boycot ntchito aziona ngati tikulakwa eti? mfundo yakuti civil serrvants’ salaries azionjezera ndi ma politicians siabwino. enanu mumaiona bwanji?
A Gondwe mwakalambadi. How can you increase taxes on data charges. If you are striving to put Malawi on the map you have to encourage internet penetration. It is the only way pupils and students can have easy and swift access to information.
Think of a student at Mzokokoto miles away from a library. The only guaranteed way for him to access information is through a smart phone, data bundle and there here goes – Wikipedia!
Kodi a vice President achinyamata bwanji akukukanizanibe kuyimba belu pakaliyalapo? Kuti muzingowonera zimenezi osawatsutsa!
A Malawi ndinu anthu opusa.
What do you send on text, Pictures of private parts, and you complain the tax will hamper development, development yo chita text mavalo?
tax increase, price increase … yet my salary still decrease!!!! WE GOT TO HAVE MONEY. We need more money.
How do u expect the old guy to appreciate the usefulness of new technology and reduce taxes appropriately when he used to write kalata kwa chibwenzi chake pa pepala and attach chimanga chokazinga chonyikidwa mu botolo la makona atatu la COVO.
Man up Mr Minister. U can use communication for advancing your agendas and reap more when you have more participation than reduce patronage. Village economics.
Govt of failing professors
Zokomera ochita bwino kapena kuti olemera nda achuma komabe tiyeni tipite chitsogolo pang’ono pang’ono titha kulekana nawo awo otchedwa madonazi ndikuyamba kuzidalira mwa ife tokha koma inuyotu inu nde muleke kuba.Osaukafe tizipeleka tikagula timayunisi tathu ta fifite kwachato.
It’s bad for us we the internet users what can we do now mwatitsekera nsika tsopano sitipindura.
Good hear Hon. Good,Goodall Gondwe
PAYE
It’s funny that some govt members were criticizing mobile operators for high internet charges and now instead of helping to reduce it you are actually fueling the rise of it’s charges hahahaha Malawi, the rest of the world are fighting for a free internet system and we are like no higher higher…..
Imraan Sadic…..also note that the cash gate started with the same DPP led govt (the very same people infact) so they are all to blame….
People who draft the budget should not smoke chamba while on duty. Malawi is one of the countries with the lowest internet usage; and yet here we are talking about “tremendeous uptake”! Instead of increasing the already high taxes introduced by Ken Lipenga, they should actually have been significantly reduced to achieve higher uptake.
We admire Rwanda on its notable achievements in the telecommunications sector and we are always expressing the desire to do the same. How is this going to be possible with retrogressive policies? Increase taxes on beer and cigarettes but not on internet. Government should stop seeing the internet as being largely for entertainment, but rather as a tool for increasing business activity – just like increased power generation.
MCP and PP should work hard to urge Government to reduce rather than increase internet charges. Government will still get more revenue from increased business activity.
Another unrelated area that is ignored by Government is the long period for clearance of cheques, especially where different banks are involved. This slows down business activity, leading to reduced revenue for the Government.
I expected this Government to focus on growing the economy; but it seems as usual they are more interested in milking an already thin cow…
complete rubbish from gondwe
Haaa! Whatsapp ili m’madzi.
We have seen studies showing that Malawi has one of the highest internet costs. How can a sensible government be adding more tax to something that is already overpriced?? Are we really serious as a nation? Does the Minister not know that in this global village, most business transaction, schooling, official communication are done through the internet?
Why can’t Government not reduce the number of village advisers from 20 to 4? why not sale or lease Sanjika Palace and Zomba State Lodge for staters this year. Why is Lilongwe Mayor and deputy buying top of the range guzzling vehicle? Why should the heavy load be carried by the poor? Why DPP thugs why?
Mavota vota munavota nokha. Musova. DPP woyeeeee!
munthu osauka ngati ine palibe chabwino apa bola ku john komwekuja moyo ndi ofewa bola rand nthumba wina asayeyekedze kundimanga ndikauyambanso wa ku john malawi wanunkha uyu akomera opata ,ku john ndi 155rand timakadya ku kfc zamkutu ndi angati ali ndi ndalama zogulira galimoto ?za nkutu.dziko lavuta ili aGONDWE mwakalamba nzeru zayamba kuchepa
I thought everywhere in the world governments are pressing for easy access to internet to promote businesses, communication, education etc. But in Nyasaland, we are doing the opposite,\is it because nkhalambazi sizidziwa kugwiritsa nthito internet ndi SMS texting!!! Amalawi please tiyeni tidzasavotere nkhalambazi. Adada Gondwe mukapume kukaya let the young blood take over.
Crazy-crazy-crazy, internet and sms tax increase? Yet you say dissemination of information will be enhenced, true?
Thwarting free flow if information yet freeing your boring tvm inorder to force all citizens to watch that gabbage.
My heart bleeds.
This dude has passed his usefulness.
Happy on 100 000 to 500 000. MRA official don’t still from us
Mr Gondwe, this is the most hardest time the Malawi nation is going through. It seems it is the most poor that will even be squeezed further. I was thinking, for the meantime, why can’t you suspend tax exemption by some big politicians and MRA bosses??? The president, ministers, MPs must not be exempted from paying some taxes. I also heard that some top dogs at mra don’t pay taxes. You know, these people are very very rich, apart from their many benefits that they enjoy. Think of someone in mtandile who wants to communicate to his poor parents in the village through his Mose walero, just by writing a simple sms . this one will have to sweat in order to do this simple communication. Infact raising internet charges doesn’t bring any sense. We are living in this era where access to information is very vital. The network providers will definitely find a escape goat and will surely treble their sms and internet charges, oopppsss!!!!!! taxes are for poor people
THEY HAVE REDUCED DUTY ON VEHICLES THAT POLITICIANS AND “THE HAVES” DO BUY & NOT YOU AND ME THE PREBIANS’ OUR COROLLA’S ARE STILL THERE……. KKKKK… GREEDY POLITICIANS.. They have said “3000 cc vehicles!!”
Dry cells amayitha
Worried about queues now oooo nearly everybody will be driving
There is nothing to celebrate here. Duty reduced on above 3,000 cc cars, who buys those cars? The answer is, “olemela kale”. Why not lower the other category of less than 2,000 cc? This is what most Malawians can afford. Mukufuna kufinya osauka kuti adzingosaukabe pamene inu mukulemera. Mudzafa imfa yowawa ndipo mukayankha kwa mulengi pa nkhanza zanunzo. Mwaona a Malawi atsegula ti ma internet cafe basi mwati muwafinye poika nsonkho.
The budget is Pro Rich as sms are mostly used by the very poor. Why reduce tax on cars which the commodity of the rich? We are we going to as country? IMF and World Bank know that Cashgate started with Muluzi perfected by Bingu messed up by JB and now re-oiled by APM and that is a fact. Therefore these donors are fully aware that APM of yesterday is the same of today- a thief eg NACGATE, JOURNOGATE and MSB/MULIGATE
technology backwards what kind of development?
Misewu mulibe koma mukufuna anthu olemera azigula galimoto mosavuta anthu amafoni tizivutika kupeza information mwakalambadi eti
So we are paying more tax to finance new presidential jet, Eish! The DPP government sucks!
Ndiye mukufuna kuti tisakubrowzeni eti, inutu mwanama mochepekedwa momwemo tizigula airtime mpaka tizikupezani, mwamva a Gondwe? wakukaya iwe!!
This marks the death of most Telecentres.
Ife tikhale osokha unu ndi achina mulli mkumalera…..shupiti zanu
Blaming the government for executing Zero Deficit budget is just being silly
As for us (eye’s opened) individuals we heap the blame on previous government AKA (Cashgate government)
This is both good and sad news. Good news coz cars will now be easier to import and at the same time hard for most Malawians on phones. Apa ndie Airtel kuiputa dala! Adulatu amaenewa! Eeeish!
GOOD GoodWELL GONDWE WE SHALL BUY GOOD CAR FROM JAPAN WITHOUT THINKING OF MRA DUTY. WE HAVE BEEN WAITING FOR THIS TIME FOE A LONG TIME.