MRA to start collecting carbon tax

The Malawi Revenue Authority (MRA) will from Monday next week start collecting carbon tax on motor vehicles.

The MRA announced this on Friday saying the tax will be paid annually when motor vehicle owners are renewing Certificate of Fitness (COF) for their vehicles.

Malata

According to MRA Commissioner General Gray Malata, all government owned motor vehicles including ambulances are exempted from the tax.

Imported motor vehicles being registered in Malawi for the first time are also exempted from the tax but foreign registered motor vehicles will require payment of the Carbon Tax at the port of entry

The tax is payable annually and the amount depends on the engine size or cylinder capacity (cc) of the motor vehicle.

Owners of vehicles with engine size of 0-1500 will 4,000 while  those whose vehicle engine size range from 1501 to 2000 will pay K8,000.

K11,500 will be required for vehicles with 2001-3000 engine sizes while those above 3000 will attract 15,500 carbon tax.

The tax was introduced in the 2019/20 budget with Minister of Finance Joseph Mwanamvekha saying the aim was to expand the revenue base and take initial steps to mitigate the effects of climate change.

The introduction of the tax has received mixed reactions with those welcoming the new measure also warning that the money should be used for intended purposes.

Some Malawians have however accused MRA of collecting tax two times on the same item.

“Why do you calculate import duty based on engine capacity as well as age of car? Is it not on consideration of carbon emissions? Why do you want to collect tax twice on same item,” said one Malawian.

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