Malawi will phase out cash payments for taxes and public services within five years under reforms announced by President Lazarus Chakwera yesterday.
The President made the announcement at Bingu International Convention Centre in Lilongwe during celebrations marking Malawi Revenue Authority’s 25th anniversary.
Chakwera said the new system would end decades of abuse against citizens in government offices and strengthen compliance.
He disclosed that tax compliance agents would soon be deployed at retail outlets and service centres to ensure customers receive receipts, while compliant taxpayers would benefit from annual tax certificates granting discounts on services such as water, electricity and toll fees.
“These are serious policy shifts, less than two months from implementation,” Chakwera said, emphasising that the principle behind the reforms was self-reliance.
“This nation generates enough revenue to finance its budget entirely, but strong systems are required to galvanise those resources towards nation building and public service delivery.”
Chakwera further said he appointed Minister of Trade and Industry Vitumbiko Mumba to expedite the reforms.
Speaking separately, Minister of Finance and Economic Affairs Simplex Chithyola-Banda said the reforms MRA has implemented so far have boosted revenue collection to a point where domestic revenue now provides over 80 percent of total government revenue and funds more than 60 percent of the national budget.
He said automation and digitalisation of tax systems already improved compliance and efficiency.
“Since its establishment in 2000, MRA has played a pivotal role in mobilising domestic resources. The taxes collected have made possible the roads we travel, the schools our children attend, and the hospitals that serve our people,” Chithyola-Banda said.
In an interview on the sidelines of the event, MRA commissioner general Daniel Daka noted that the reforms, particularly the electronic invoicing system, will help the institution meet its revenue collection targets.
“We have beaten our target for July,” he said. “And we are confident that at the end of the year, we can beat the target set for the 2025/26 financial year.”
In an earlier interview, Economics Association of Malawi president Bertha Bangara-Chikadza urged the government to broaden the tax-base to boost revenue collection.
She said: “For example, we always talk of enhancing domestic revenue mobilization, broadening tax base to reduce the fiscal deficit and stabilise the economy, but Malawi’s VAT exemptions cost about 3 percent of GDP.
“Policies, such as these, need to be relooked at. The country needs to review existing tax incentives, and assess the necessity of exemptions. Such reforms will increase revenue collection and help narrow the fiscal deficit.”
Established by an Act of Parliament in 1998 and operational since February 2000, MRA took over tax functions previously handled by the Ministry of Finance. Over the past 25 years, it has implemented reforms in customs, tax administration automation and enforcement mechanisms.
Looking ahead, both Chakwera and Chithyola-Banda emphasised the need for sustained reform to ensure that revenue collection not only meets fiscal targets but also supports Malawi’s long-term vision of a resilient and self-sustaining economy.
