Public outcry over the 0.05 percent levy on bank transfers persists, with customers lamenting the daily deductions on their accounts as commercial banks move to collect the tax in arrears. The 0.05 percent levy on bank transactions came into effect December 31, 2025, and over the past weeks, banks have been deducting the levy in arrears.
However, the move has triggered widespread complaints from customers who report multiple daily deductions. This comes as the country is advocating enhanced digital banking services uptake, which saw the value of digital payments growing to K187 trillion in 2024. This means the government could collect K935 million using the levy.
Meanwhile, one customer told Business Times that the deductions prompted them to change options of transacting. “At first, I noticed that the bank was deducting me multiple times in a day and this is an account where I had kept about K10 million. So, I went to the bank and deposited it into another bank account at a different bank.
“I have just now learned that it is the 0.05 percent bank levy. But still, I feel it is too much,” said the customer.
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Consumers Association of Malawi (Cama) Executive Director John Kapito has warned that the levy could reverse gains made in promoting financial inclusion. In an interview on Friday, Kapito said the measure is creating ‘double taxation’ on inflows and outflows, saying that the cumulative deductions are difficult for consumers to track and risk discouraging the use of formal banking services.
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“Malawi has been grappling with issues of financial inclusion, trying to increase the number of banked people. But I think we will see later that the number of banked individuals is going to reduce,” he said. Economist Marvin Banda said the problem is not necessarily the levy itself, but how it was introduced and communicated. He said retrospective deduction has created a perception of unfairness, exposed poor policy communication and ultimately has had an erosive impact on trust in both the banking system and public institutions.
“As others become more willing to bear the cost of transactions others will revert to cash transactions, reduce usage of banking and other financial instruments which will ultimately affect financial and digital inclusion,” Banda said Bankers Association of Malawi (Bam) Chief Executive Officer Lyness Nkungula said the frequency of deductions being experienced is mainly due to arrears recovery, the frequency of deductions and going forward, deductions will be applied in real time.
“Banks are required under the Consumer Protection Act and Paragraph 31 of the Financial Services Directive, 2024 to provide real-time disclosure of fees and charges for digital transactions. The levy was gazetted on December 30, 2025, and banks are obliged to comply with the law,” Madinga said. Confirming on the arrears, Malawi Revenue Authority (MRA) Head of Corporate Affairs Wilma Chalulu said the levy is being implemented in line with the law.
