K452 million in carbon tax collected in two months


The Malawi Revenue Authority (MRA) has collected K452 million in carbon tax since the tax was introduced two months ago.

MRA told the Parliamentary Committee on Natural Resources and Climate Change on Tuesday that it started implementing the carbon tax on 25th November, 2019 and has since collected about K452 million from both foreign and locally registered motor vehicles.

Ministry of Natural Resources and Ministry of Finance officials on Tuesday also briefed the Committee on management of carbon tax levy and removal of taxes on Liquid Petroleum Gas (LPG).

Ministry of Natural Resources, Energy and Mining said it has since submitted a request to the Ministry of Finance inquiring about the modalities of transfer of the carbon levy to the environment fund which the ministry in collaboration with Malawi Environmental Protection Agency (MEPA) will use for its operational purposes including addressing environmental degradation and ensuring environmental protection.

The carbon 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 pay K4,000 while  those whose vehicle engine size range from 1501 to 2000 pay K8,000.

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

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 require payment of the Carbon Tax at the port of entry.

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.