Malawi Government has stopped its plan to hike duty on second-hand imported vehicles.
Minister of Finance and Economic Affairs Sosten Gwengwe has announced the U-turn today after an interface meeting with importers of second-hand vehicles who protested against the fixed rates introduced by the Malawi Revenue Authority.
The rates were supposed to come into effect on 1 August.
Speaking after meeting representatives of car importers in Lilongwe, Gwengwe said Malawi Revenue Authority (MRA) used wrong valuation and Parliament did not authorize an increase in import duty.
According to Gwengwe, MRA was only supposed to use averages of the rates that importers have already been paying in coming up with a mutually agreeable schedule.
He further said that the rates were implemented without consulting relevant stakeholders.
Meanwhile, Chairperson of Car Dealers Association Themba Mkandawire has said they expect the process of coming up with the new schedule to be transparent and consultative.
A schedule which went viral on social media last weekend showed fixed rates for various vehicles with importers expected to pay over K3 million in duty for vehicles such as Sienta, Vitz and Passo.
The Human Rights Defender’s Coalition (HRDC) recently described the tax rates as unlawful.
“Tax, as a principle, is a percentage of the actual value of the imported commodity. The approach being taken by the MRA using this new method is of determining tax value first in order to calculate the value of the imported goods.
“This contradicts established principles of taxation and deviates from international law applicable to customs matters,” HRDC said in a statement.