Govt criticized over revocation of special taxes on used vehicles

Government has come under fire for revoking specific taxes on used motor vehicles, with business operators describing the decision as a blow to their trade.

On 27th October 2023, government gazetted the Customs and Exercise (Tarrif) Amendment (No.6) Order, 2023 which had modified collection of customs duty on used vehicles to be based on model, engine size, year of make  and origin, regardless of the value or price of the vehicle, effective 1st December.

Effect of the Kwacha devaluation still has a mark.

However a decision issued by the Minister of Finance and Economic Affairs in a gazette dated 30th November 2023, government has rescinded the decision.

In an interview, Steven Kapoloma, the Head of Corporate Affairs at the Malawi Revenue Authority, explained that the development means a continuation of the existing calculation method for duty on used motor vehicles which is based on value and price of the vehicle.

Reacting to the development, Themba Mkandawire, Chairperson of the Car Dealers Association of Malawi told MIJ Online that the decision by government is ill-timed as many business operators had already placed orders based on the new system hence this may lead to loses.

“Importing cars is a process that takes time, sometimes it may take a month or two and then to have government rescinding its decision just a day before it comes into effect; this is a clear disregard of the welfare of those into car dealer business.

Government should have tested the system to see how well it works before revoking its decision”, said Mkandawire.

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