Malawi introduces 16.5 % VAT on bus imports: ‘No standing passengers, all buses should be fitted with seat belts’.

Malawi Government has introduced 16.5% Value Added Tax (VAT) on imported minibuses and big buses three years after it scrapped it off following recommendation by operators.

In 2014 national budget, government removed the Import Duty, Import Excise and VAT on imported minibuses which eased a tax burden on operators and importers.

Presenting this year’s budget statement in Parliament in Lilongwe, Minister of Finance, Economic Planning and Development, Goodall Gondwe announced some changes to the tax regime, introducing VAT on imported minibuses and big buses with effect from Friday (19th May) midnight.

The VAT will be applicable on minibuses and buses manufactured within a period not exceeding five years.

The introduction of the VAT is one of amendments made to the Customs and Exercise (Tariffs) Order.

Aside introducing the VAT on buses, government through Malawi Revenue Authority (MRA) has also removed Customs Procedure Codes (CPCs) 4000,443 and 4071,443 for minibuses and buses manufactured within a period of five years of seating capacity exceeding 11 persons but not exceeding 44 persons including driver.

There is no immediate reaction from Minibus Owners Association of Malawi (MOAM) but MRA Commissioner General, Tom Gray Malata has advised the general public especially bus importers and operators to take note of the changes and comply accordingly.

Among other amendments to the Customs and Exercise (Tariffs) Order is the re-introduction of single excise rate of US$ 15 per 1,000 cigarette sticks or its Malawi Kwacha equivalent for both imported and local manufactured cigarettes.

Meanwhile, Parliament has endorsed a proposal stopping buses from carrying standing passengers and that all buses should be fitted with seat belts.

The proposal also demands that minibuses should only be operating on designated routes identified by color code and route numbering.