The Malawi Revenue Authority (MRA) has collected about MK600 million from both foreign and locally registered motor vehicles since its implementation of the carbon tax on November 25, 2019 but Parliamentary Committee on Natural Resources and Climate Change has said there should be a review in the decision to exempt government vehicles from the levy, saying revenue is being lost in the process.
MRA director of planning and research Waziona Ligomeka said the revenue collecting body has so far collected K600 million and expects K1.7 billion by June this year.
According to MRA, the carbon tax which is paid once a year, is charged depending on cylinder capacity (CC) of the motor vehicle which ranges from MK4, 000 for smaller vehicles to MK15,500 for vehicles with more than 3000CC.
Parliamentary Committee on Natural Resources and Climate Change chairperson Welani Chilenga expressed sadness over government decision to exempt state vehicles from carbon tax.
Said Chilenga: 2We have started well, but our concern is on the criteria used to exempt government cars. We would have collected more if everyone was included, government vehicles, as well as factories and other users.”
Chilenga argued that the exemption on carbon levy was not good saying revenue is being lost in the process.
But Principal Secretary to the Treasury Cliff Chiunda told the committee that government will get clear feedback from MRA on the matter.
During presentation of the 2019/2020 budget statement in Parliament Minister of Finance, Economic Planning and Development Joseph Mwanamveka said government introduced a carbon tax on local and foreign registered motor vehicles as a source of domestic resources for climate change management.
Carbon tax is a tax on motor vehicles paid once a year, it is applicable to locally-registered vehicles as well as those with foregoing registration number plates. MRA started implementing carbon tax on locally-registered motor vehicles on November 25 2019.