Govt moves to consult on vehicle fixed duty
Malawi Government has bowed down to public pressure and anger on the newly-introduced fixed duty on imported vehicles and has since called for a meeting with second-hand motor vehicle importers on Friday.
Minister of Finance and Economic Affairs Sosten Gwengwe is scheduled to preside over the meeting at Capital Hill in Lilongwe to discuss the newly gazetted Customs and Excise (Tariffs)(Amendment)(No.4) Order on the vehicles, according to communication from the ministry.
A letter dated July 5 2023 we have seen signed by Secretary to the Treasury MacDonald Mafuta Mwale said Gwengwe will meet three representatives of the Second-Hand Motor Vehicle Traders from Southern, Central, Northern and Eastern regions.
“The objective of the meeting is to get your views on the newly introduced system of clearing second hand motor vehicles with the Malawi Revenue Authority (MRA),” it reads
The meeting, which is funded by the ministry, comes a day after Human Rights Defenders Coalition (HRDC) gave government a seven-day ultimatum to rescind its decision or face unspecified action.
HRDC also urged government to immediately engage a wide range of stakeholders to gather diverse perspectives before implementing the policy it said would “significantly impact the citizens negatively on their economic welfare.”
In an interview yesterday, HRDC chairperson Gift Trapence welcomed government’s swift action on the matter, but said his organisation’s expectation was that other key players will also be invited for the engagements.
“It is also our expectation that the meeting will not just be a window-dressing rather will address the taxation issues on vehicle importation,” he said.
Reacting to the meeting, a Car Dealers Association of Malawi member Amon M’bwana commended the ministry and described the roundtable meeting as a “good gesture”.
“That is being democratic. When there are critical issues people must always discuss, agree and then move forward not making unilateral decisions. So we are expecting something positive in form of revision of the taxes to the satisfaction of everybody,” he said.
Besides HRDC, the Forum for National Development and other like-minded civil society organisations and concerned citizens also threatened to petition Parliament to force the repeal or price reduction of the taxes.
The fixed rates target second-hand motor vehicles manufactured between 2001 and 2020. They are expected to roll out on July 15 2023.
For vehicles that are zero to three years old and those older than 23 years, an ad valorem tax will be used .
