Malawi used car dealers cry foul over higher duties

Small-scale importers of used cars in Malawi are crying foul over current taxation imposed on imported vehicles.

Malawi has seen an influx of used cars, mostly imported from Japan. The vehicles are sold at low prices, some as cheap as 2,500 dollars apiece.

Lilongwe Used Car Association (LUCA) are up in arms over the higher tax measures and  asked Minister of Finance Dr Goodall Gondwe to remove high taxes, arguing it  will destroy their businesses or result in much higher prices.

Ernest Zinyemba Soko,  speaking on behalf of the LUCA  executive told Nyasa Times that  the  duties are too high for  THE business to show a profit.

Soko said Malawi is a poor country and the citizens cannot afford to buy new vehicles from dealers such as Toyota Malawi, CEFAO, Tata, Automotive, Stansfield, Mahindra, or Mike Apple and Gatto.

The car traders claim the higher taxes  will kill small-scale dealers who depend on vehicle sales for their livelihood.

Soko said the car dealer will meet to lobby government to rescue them from the new tax measures.

In parliament this week,  Balaka North MP and UDF leader in the House, Lucius Banda, asked inance, Economic Planning and Development Minister Goodall Gondwe to consider reducing import duty and excise on vehicles.

Gondwe said old vehicles are hazards to the environment..

Banda argued that the majority of the citizenry fail to purchase vehicles because of extra import duty costs which he said were prohibitive.

But Gondwe responded: “The import duty and excise on vehicles are designed to minimise air pollution. In some countries, even those in Africa, they ban importation of such cars or pay extra taxes.”

However, Banda maintained that the duty is so prohibitive,  that it takes some people five years to pay by which time the vehicles have become ziphakasala (not road worthy).