Processing fee at borders affecting STR
From the corners of Mchinji, I watch with interest various Kabaza riders (bicycle taxi operators) riding to and from the borders of Malawi and Zambia with merchandise on their carriers.
Most of these people primarily are meant to be taxi operators, but it has turned out that they are more than that.
These operators have contributed much in cross-border trade between Malawi and Zambia.
In 2010, Malawi and Zambia launched Simplified Trade Regime (STR) through its Mchinji –Chipata (Mwami) border under the Common Market for Eastern and Southern Africa (Comesa) STR with an aim of promoting and simplifying life for these small traders and transporters.
Under STR, the countries agreed that qualifying goods worth $500 (now increased to $1 000) be allowed to pass border points duty free and traders will not be asked to provide certificate of origin of their goods as long as they are on the common list of products between the countries.
But three years down the line, most Malawian small-scale traders seem not to be aware of this agreement and continue using unchartered routes to bring their merchandise, to Mchinji as they are afraid to pay duty in form of a processing fee at the border posts.
“We still use the unchartered routes to import our goods because we are afraid to pay duty at the border,” said Charles Banda, a trader at Mchinji main market.
Banda, like other small cross-border traders in the district, purchase their products which include cooking oil in Zambia as they are cheaper.
“I usually buy my things in Chipata [in Zambia] because things are cheaper and the distance is shorter than travelling to Lilongwe, Chipata is just 32 kilometres from Mchinji while Lilongwe is 110 kilometres, so you can imagine the distance,” he said
Banda is among many who are engaged in cross-border trade in Mchinji, but doesn’t use the border post for fear of paying a processing fee that the Malawi Government charges.
“When we are on the Zambian side they don’t charge us anything with our goods because they are small, but when we come this side, things become difficult, we are told to pay even for goods which haven’t exceeded K30 000 ($100) so for someone like me I choose to use the unchartered routes,” he said.
According to information sourced by Mana from the Malawian side of the border, the Malawi Revenue Authority (MRA) through its customs department demand payment of K5 000 as a processing fee on goods.
“People are supposed to pay this K5 000 as a processing fee here at the border,” said one source from the customs department at Mwami border, who sought anonymity.
Banda, however, said he is aware of the STR but does not know exactly how it operates.
Cross-Border Traders Association of Malawi chairperson Chambakata Chanza told Mana that the issue of processing fee is affecting both Malawian traders and the government as it is losing revenue through traders who use of unchartered routes.
