By Wezzie Gausi:
The Malawi Revenue Authority (MRA) has clarified that the excise tax stamps, which some quarters are protesting, are not additional taxes but rather a tool to identify products on which excise tax has been paid.
A group calling itself Malawi First People First Wednesday gave the government a 10-day ultimatum to act on different issues, including the tax stamps, inefficiencies at the National Registration Bureau (NRB) and what it calls political arrests.
“The tax stamps policy, set to be implemented by MRA, will strangle our already struggling businesses, stifling innovation and entrepreneurship,” the group’s leader, activist Bon Kalindo, said.
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Among other demands, the group called for the suspension of the implementation of the tax stamps system and meaningful consultations with stakeholders.
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In response to concerns about the tax issue, MRA Director of Corporate Affairs, Steven Kapoloma, said the tax collector has actively engaged stakeholders, including manufacturers, distributors, wholesalers, cross-border traders and importers, regarding the excise tax stamp system before and during its initial implementation phase.
“Just last week, MRA conducted meetings in Blantyre and Lilongwe with cross-border businesswomen.
“During these engagements, the authority and concerned stakeholders agreed on a way forward and the authority is currently addressing all issues noted during the initial phase before full rollout,” Kapoloma said.
He added that the implementation of excise tax stamps was extended following the amendment of the Customs and Excise Act of 2021.
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According to Kapoloma, the amendment expanded the requirement for excise tax stamps to include other specified excisable products beyond tobacco cigarettes.
He said reasons include protecting local and legitimate businesses and safeguarding them from unfair competition due to illicit trading activities such as smuggling and counterfeiting.
Another reason is controlling consumption, according to MRA.
The tax collector says this helps in “reducing the consumption of harmful, unbranded, and counterfeit products whose sources and quality cannot be verified”.
“[It is also aimed at] encouraging compliance among manufacturers, importers and distributors through the availability of production and importation data,” Kapoloma said.
The MRA spokesperson added that excise tax stamps have been applicable on cigarettes for over 10 years in Malawi.
He said the stamps have just been extended to a few excisable products such as alcoholic and non-alcoholic beverages like bottled water, energy drinks, carbonated soft drinks, fermented sweet tea, non-alcoholic beer, as well as lotion and glycerine.
In a general comment on the demands by the activists, Minister of Information Moses Kunkuyu said government has taken note of the issues.
Kunkuyu said NRB is continuously perfecting the identity card issuance system and that the right to vote by every Malawian will be respected and enjoyed.
On the tax issue, the minister said government values the inputs from the public that come through the pre-budget meeting consultations and through other means.
“The Honourable Minister of Finance always takes note and taxes are not fixed forever. There is always room for changes,” Kunkuyu said.
He added that government respects the right to demonstrate but that people “must not take demonstrations as a business but as a priceless right whose value must always be preserved in a democracy”.
