Government has announced several new taxes and levies aimed at raising revenue and stabilising Malawi’s weak economy.
Presenting the 2025–26 Mid-Year Budget Review in Parliament, Minister of Finance Joseph Mwanamvekha said the economy is under pressure and the new measures are needed to help the country recover.
He said Malawi is facing “unsustainable debt, stagnant revenues and a closed fiscal space,” which he blamed on the previous administration.
“Furthermore, Mr. Speaker Sir, public finances were in disarray, revenues were stagnant, and key sectors were neglected. The kwacha had sharply depreciated against major trading foreign currencies and inflation had eroded household incomes. The fiscal space was effectively closed, leaving Government unable to meet even the most basic obligations without resorting to borrowing,” said Mwanamvekha.
Mwanamvekha announced a 0.05 percent levy on all bank-to-bank transfers, including transfers within the same bank. Mobile money transfers above K100,000 will also attract a 0.05 percent levy. He said these charges are designed to target high-income users while shielding low-income earners.
The Value Added Tax has been raised from 16.5 percent to 17.5 percent. Mwanamvekha said Malawi’s previous VAT rate was lower than rates in countries such as Tanzania, Morocco and Madagascar.
Government has also removed the thresholds on betting and lottery winnings. This means all winnings will now be taxed, with the withholding tax increasing from 10 to 15 percent. The Malawi Revenue Authority has been directed to begin registering landlords, especially in urban areas, to ensure rental income tax is paid.
For the business sector, the Minister announced a 0.5 percent Minimum Alternative Tax on companies with annual turnover above K5 billion that have operated for at least three years. He said this is meant to ensure companies that repeatedly declare losses still contribute to national revenue.
“Companies will pay, either normal corporate income tax levied at 30 percent
on profit, or 0.5 percent of turnover, whichever will be higher. To protect start-ups and small enterprises, the Minimum Alternate Tax will apply only to companies with turnover of more than K5 billion that have been operating for more than three years. Further, whatever amount is paid above the minimum alternative tax will be treated as a credit to be offset with future tax obligations,” said Mwanamvekha.
The Minister also confirmed changes to the PAYE system, including a new 40 percent tax bracket for people earning more than K10 million a month and an increase in the tax-free bracket from K150,000 to K170,000.
Other measures include a 20 percent surcharge on cement imports, a 2 percent levy on motor vehicle insurance policies and the end of visa-free entry into Malawi, with visa fees now to apply.
Mwanamvekha appealed for national support, saying the country must make “necessary sacrifices” to fix the economy. He said, “We must restore fiscal stability. These measures are not by choice, but by necessity.”
Parliament will debate the new tax measures in the coming days.