The Malawi Revenue Authority (MRA) has launched an extended Excise Tax Stamps Regime to bolster the tracking and tracing of excise tax payments.
The initiative, dubbed ‘Kalondola’, is aimed at curbing smuggling, illicit trade and safeguarding local manufacturers while protecting consumers.
Speaking during a press briefing in Blantyre on Friday, MRA Deputy Commissioner General Henry Ngutwa expressed optimism about the regime’s potential to combat illegal activities.
He said the excise tax is applied to goods and services deemed to have negative externalities, such as alcohol and tobacco.
“MRA has the duty to protect society from consuming hazardous products. By taxing these merchandise, governments aim to discourage their consumption or use, promote public health and generate revenue,” Ngutwa said.
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The ‘Kalondola’ is an indirect tax typically levied on specific goods, services or activities rather than on income or property.
He said the move marks a significant step in Malawi’s efforts to improve tax compliance, combat illicit trade and protect consumers.
The regime targets local manufacturers, importers and distributors of specified excisable products.
“This tax is included in the price of the product or service, and the producer or seller is responsible for remitting the tax to the government,” Ngutwa said.
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He said the initiative involves stamping a physical or digital seal or sticker on a product to indicate that excise tax has been paid.
“Tax stamps seek to protect local, legitimate industries from unfair competition from illicit, smuggled, and counterfeit excisable products.”
The regime, which commenced on May 1, aims to promote voluntary compliance amongst manufacturers and importers while optimising excise tax collection for the improved delivery of social services.
Ngutwa highlighted that the highest cost of the tax stamps is K32, with the lowest being K12.
The stamps target various products, including water, carbonated drinks, alcoholic beverages and tobacco products.
He assured that the introduction of tax stamps would not prompt manufacturers to increase commodity prices.
The Excise Tax Stamps Regime was gazetted in January 2024 and has now been fully implemented as of May 1 2024.
