The manufacturing industry has lamented the effect of some recently introduced taxes by the government, saying they are driving down business activity.
Industry players warn that, if not reviewed, the taxes would hurt the industry further and affect the capacity to contribute towards national growth through taxes.
In an interview, Manufacturers Association of Malawi President Gloria Zimba said manufacturers entered 2026 already under strain, but a wave of new fiscal measures has made conditions close to unbearable.
She cited the increase of Value Added Tax to 17.5 percent, the introduction of tax stamps by the Malawi Revenue Authority, rising fuel costs and surging utility bills as the key drivers pushing up the cost of production to levels that consumers can no longer absorb.
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“The cost of doing business in Malawi has become more exorbitant and almost unattainable. Day by day, we see a lot of punitive policies being put in place,” Zimba said.
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To illustrate the scale of the crisis, Zimba pointed to Castel Malawi, whose monthly product sales have collapsed from about 56,000 hectoliters during each month of the first quarter last year to around 22,000 hectoliters in the same period this year—a fall of 60 percent.
She said among the top five manufacturing companies, the drop ranges from 40 percent to 60 percent, with all producers affected.
Malawi Union of Micro, Small and Medium Enterprises President James Chiutsi said the recent 2 percent cut in the policy rate by the Reserve Bank of Malawi had done little to ease pressure on smaller businesses.
“The rate was cut but banks are still not willing to lend. The tight monetary policy needs to be loosened up to make lending easy for SMEs, or the government should deal with the bank’s cartel which is in this country,” Chiutsi said.
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Chiutsi said the outlook for the second quarter remained mixed, with businesses and consumers holding back spending in anticipation of further fuel and electricity price increases.
Ministry of Finance spokesperson Williams Banda defended the VAT increase, saying it was a consumer tax and therefore does not directly affect manufacturers.
He also said tax stamps introduced by MRA were intended to ensure accountability for all products produced or imported. “VAT is a consumer tax and, therefore, it does not affect the manufacturers. The tax stamps were meant to ensure that every product produced or imported is accounted for by MRA,” Banda said.
