Malawi Revenue Authority (MRA) has disclosed plans to introduce excise tax stamps from April 2024.
The stamps are aimed at protecting local and legitimate industries from unfair competition of illicit, smuggled and counterfeit products.
An excise tax stamp is a physical or digital seal or sticker on a product to indicate that excise tax has been paid or will be paid.
Speaking during a media training in Mzuzu yesterday, MRA Taxpayer Education Specialist Wadza Otomani said the regime targets local manufacturers, importers, distributors of specified excisable products, which include alcoholic and non-alcoholic beverages, water and body lotions.
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Otomani said with the tax stamps, MRA is upbeat that voluntary compliance among manufacturers and importers will be enhanced.
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He said there is a need for a proper mechanism to verify if what a company declares is true.
“The tax stamps have not yet been gazetted but we are hoping that this will be done between April and June 2024. I would like to emphasise that introduction of excise stamps is not a version of ‘tax on tax’, it’s just like the block management system, which is a tax compliance tool. I should also say that stamp price is minimal and every operator will have tax stamps hence leveling the playing ground. As such, this will not affect product pricing,” he said.
MRA is implementing the tax stamps, with Switzerland-based security company SICPA which will be supplying the tax stamps, among others.
Meanwhile, the tax collecting body has said that its Block Management System (BMS) tax base has been widened with K40.9 billion since its introduction in 2021.
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The agency said since the introduction of the system, 5 455 new businesses have been registered nationwide.
One of the managers in the MRA’s Corporate Affairs Division Wilma Chalulu said the revenue collection body has seen a lot of people voluntarily entering the tax net after understanding their obligations.
“What the block management system was designed to do was to get closer to those taxpayers—to share information with them,” he said.
The BMS was inspired by the 2019 FinScope Malawi micro, small and medium enterprises study, which showed that there were only 27,732 taxpayers out of 1.6 million MSMEs in the country as at December 2020.
