Faced with persistent funding requests from legislators and Cabinet colleagues, Uganda’s former Minister of Finance, Matia Kasaija, famously used to respond with a light-hearted assurance: “Colleagues, money will come.”
His viral tagline crossed my mind as the Malawi Revenue Authority (MRA) launched its ambitious 2026-31 Corporate Strategic Plan in Blantyre on Monday. Through the plan, MRA targets to widen the tax net, targeting a massive leap in domestic revenue from K6.07 trillion in the 2026/27 fiscal year to K22.51 trillion by 2030/31.
Nobody envies the MRA or the Treasury right now. With declining donor support, low domestic revenues and skyrocketing budget deficits, Malawi is trapped in a borrowing cycle. The situation is precarious because nearly 79 percent of domestic revenue in the K11 trillion 2026/27 National Budget is absorbed by statutory obligations such as wages and debt servicing.
Yet, while authorities scramble to squeeze more from the tax net, a gaping hole remains wide open.
The Ministry of Finance’s recent Tax Expenditure Report reveals that revenue forgone through tax exemptions, deductions and credits doubled from K370.8 billion in 2022 to K811.6 billion in 2024. While these exemptions are said to be designed to stimulate investment and job creation, the breakdown tells a deeply unfair story. Import duty exemptions surged from K36.8 billion to K102.9 billion, while import excise exemptions jumped from K12.3 billion to K63.7 billion.
Further, these figures prove that “money is there” to plug the fiscal deficits we fill through borrowing. Unfortunately, that available money is handed out as freebies to the wrong people.
Under our current setup, the President is entitled to import luxury items, including motor vehicles duty-free at will. Judges, legislators and other senior public officials enjoy similar tax holidays for high-value motor vehicles.
Ironically, these are the very people who can comfortably afford to pay, even a percentage of the duty due by meeting the tax collector half-way. Meanwhile, the “plebeians” are squeezed to their last tambala.
Earlier this year when Parliament passed aggressive tax reforms, Minister of Finance, Economic Planning and Decentralisation Joseph Mwanamvekha painted a grim picture: “Debt stands at K24 trillion while income is at K6 trillion. This means we are broke.” To fix this, the State slapped citizens with a 15 percent final withholding tax on rental income, a three percent motor vehicle insurance levy and taxes on gambling earnings over and above a 17.5 percent value-added tax (VAT) rate and mobile money transaction levies.
Members of Parliament justified these harsh taxes by citing heavy national obligations, including the massive K1.1 trillion allocated to the Constituency Development Fund (CDF) with each of the 229 constituencies getting K5 billion annually. But what they chose to ignore are the severe macroeconomic risks as Economics Association of Malawi (Ecama) president Bertha Bangara-Chikadza rightly warned that relying heavily on consumption taxes erodes consumer purchasing power while stunting economic growth. Similarly, the Malawi Confederation of Chambers of Commerce and Industry cautioned that these measures heavily strain domestic businesses.
As I argued in this column in January, Malawi’s tax system can only be fair if everyone shoulders the burden. It is deeply ironic that while the masses are forced to swallow the “bitter pill” of aggressive taxation, the political elite continue to wallow in the luxury of tax exemptions.
If politicians and other duty-bearers have the welfare of the masses at heart, the time is now to bite the bullet and urgently suspend the elite tax privileges for the next two years to stabilise our public finances standing. Milking an already thin cow dry is a suicidal strategy and by overburdening the public while shielding themselves, our duty-bearers are actively killing the goose that lays the golden eggs.
So, colleagues, “money is there!” Nangano?
Finally, to the MRA team led by board chairperson MacFussy Kawawa, Commissioner-General (CG) Felix Tambulasi, Deputy CG Allans Nkhoma and all congratulations on the launch of the Corporate Strategic Plan. I wish you all the best, but, as some taxation and economic experts asserted in The Nation of Tuesday this week, balance expansion of the tax net with eased burden on low-income earners.
