The Ministry of Finance has dismissed as false and misleading claims that the government plans to introduce worldwide taxation, pension income tax and death benefits tax.
In a public notice issued Monday, the Treasury categorically refuted suggestions that government has decided to amend existing tax laws to introduce the three taxes.
“These claims are false, misleading, and entirely unfounded,” the notice reads.
The ministry urged stakeholders and members of the public to verify information and seek clarification on matters relating to public finance through official channels, pledging commitment to transparent and inclusive engagement.
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The clarification comes amid heightened public anxiety over tax policy following the November 2025 mid-year budget review, which introduced a 0.05 percent bank transfer levy, a 0.05 percent mobile money transfer levy on transactions above K100,000, and a one percentage point increase in Value Added Tax from 16.5 percent to 17.5 percent.
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The mid-year review also adjusted the Pay As You Earn structure, raising the zero-rate threshold from K150,000 to K170,000 monthly while removing the 25 percent tax bracket.
In its 2026/27 pre-budget proposals submitted to Treasury, the Bankers Association of Malawi called for clear definitions of the bank transfer levy scope to avoid unintended taxation of all banking activities, warning that ambiguity could result in heavy taxation on ordinary transactions.
The Malawi Confederationof Chambers of Commerce and Industry similarly urged government to adopt a carefully balanced policy approach to tax measures, cautioning against policies that could harm economic growth.
Consumers Association of Malawi Executive Director John Kapito warned the bank transfer levy could derail financial inclusion gains, predicting consumers might prefer to transact outside the formal banking system.
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“I think we are going to witness a situation where people prefer to transact outside the formal system. Most consumers would rather move away from banks, because you can’t have your money just be eaten by taxes in the bank,” Kapito said.
Minister of Finance Joseph Mwanamvekha previously defended the bank transfer levy, arguing it is significantly lower than commercial bank charges and targets wealthy Malawians rather than the poor.
“What our rate of 0.05 percent for bank transfers is much smaller than what banks charge. We are working on the principle that those that earn more should contribute more. We don’t want to squeeze the very poor people that we want to protect,” Mwanamvekha said.
Under current Malawi tax law, pension contributions to approved pension funds are tax-deductible up to 15 percent of an employee’s annual salary, while old age pensions paid from public funds are tax-exempt.
