Tuesday, March 31 2026, was one of those rare occasions in Parliament when members of Parliament (MPs) from both sides of the National Assembly on Tuesday passed a set of Bills to facilitate implementation of taxation reforms. This unity of purpose is often the case when money for their pockets is at stake.
Minister of Finance, Economic Planning and Decentralisation Joseph Mwanamvekha plainly told Parliament that the measures are meant to salvage the Malawi Government from collapse due to worsening public debt that is consuming the bulk of the domestic revenues generated.
“Debt stands at K24 trillion while income is K6 trillion. This means we are broke… It will be hard for government to service the debts if we do not collect more,” he said.
The package covers taxation, tax administration, value-added tax (VAT) and customs that forms the backbone of the K11 trillion 2026/27 National Budget passed last week and rolls out today.
From the measures, I picked 15 percent final withholding tax on rental income, three percent motor vehicle insurance levy and new taxes on gambling winnings and disposal of listed shares. This is over and above the 17.5 percent VAT rate and “levy” on mobile money and electronic banking transfers.
To justify the taxes, some legislators contended that they are a necessary evil because the government has so much on its lap, including the K5 billion Constituency Development Fund for each of the 229 constituencies, a whopping K1.1 trillion in the K11 trillion 2026/27 National Budget.
What the legislators do not see or choose to ignore is what Economics Association of Malawi (Ecama) president Bertha Bangara-Chikadza observed that while the tax reforms are necessary, they come along with macroeconomic risks due to increased reliance on consumption taxes. In other words, they have reduced the purchasing power, potentially weakening growth in the near term.
Earlier this year, the Malawi Confederation of Chambers of Commerce and Industry also cautioned that while revenue measures in the 2025/26 National Budget that elapsed yesterday may help fix Malawi’s fiscal challenges, they could also strain businesses.
In my January 15 2026 Business Unpacked entry titled ‘Everyone should bear the burden of taxes’ I argued that Malawi’s tax system would be fair if everyone shouldered the burden and the duty-bearers sealed the leakages that drain almost 30 percent of the resources from the public finance management system. Further, there are privileges that can be suspended for a period of say one or two years to save the situation.
Taxes are unavoidable as Benjamin Franklin, an inventor, publisher, author and one of the founding fathers of the United States of America aptly said: “In this world, nothing can be said to be certain, except death and taxes.”
Even in the days of Jesus over 2 000 years ago people paid taxes, but some still grumbled. In one incident highlighted in Matthew 22 verses 15 to 22 in the New Testament of the Holy Bible, the Pharisees and Herodians, apparently fed up with the Roman Empire tax system, set out to corner Jesus by asking Him: Is it lawful to pay taxes to the emperor or not?” In his response, Jesus was philosophical as He often did, stating: “Why are you putting me to the test, you hypocrites? Show me the coin used for the tax.” They handed him a denarius bearing the portrait of the emperor and He told them: “Give to Caesar what belongs to Caesar and give to God what belongs to God.”
From time immemorial, earthly governments have used taxes to finance the services they provide to the citizenry. Taxes finance construction of roads, schools, hospitals, purchase of medicines and other social services.
Besides VAT and other levies or taxes, a Malawian is grappling with high Pay As You Earn thresholds that introduced a 40 percent bracket.
To keep this economy afloat, Mwanamvekha has to raise money and spend. The minister is on record as having said during Pre-budget Consultation Meetings earlier this year that reversing the tax decisions and new proposals is not easy and implored Malawians to wear brave faces and swallow the “bitter pill”.
Personally, I understand and appreciate the situation this country is going through. But what I don’t understand is why Mwanamvekha and his predecessors have always used a template that only targets the masses while letting go potential revenue streams simply because they are among the beneficiaries. MPs did the same on Tuesday, justifying the same as privileges.
Hey, this is like war time and in war you waive certain requirements. In the situation were sailing through, it does not make sense to tax a poor low income household for buying salt, soap or cooking oil while allowing a public officer, with the capacity to pay taxes, to import duty-free a K500 million worth of vehicle simply because it is a privilege.
If this is not inconsiderate and selfish, then what is? Why not suspend this and those seeking to buy be asked to pay the relevant duties and taxes the Malawi Revenue Authority is losing.
I would urge President Peter Mutharika, as “a listening President”, to set the ball rolling as that is probably the only way others can follow. For Malawi is to get out of the economic doldrums, the leadership must lead by example by paying taxes, including duty on imports.
Duty-bearers should always guard against being seen as prioritising decisions that benefit them more at the expense of the governed. Milking the already thin cow almost dry is suicidal as it is akin to short-sightedness and self-destruction mode, kind of killing the goose that lays the golden eggs.
