Luxury shoppers are in for an expensive surprise as the government moves to slap hefty new taxes on some of their favourite treats, with perfumes, wristwatches and jewellery among the items facing sharp increases.
The changes, announced by the Malawi Revenue Authority (MRA), will affect products ranging from perfumes, jewellery and wristwatches to powdered drink flavours, imported cement and hybrid vehicles.
The new policy, detailed in a document titled *Tax Measures and Projects’ Update* and confirmed in an interview with MRA Manager of Marketing Communications Patrick Achitabwino, creates a clear divide by removing import duties on essential goods while imposing higher excise taxes on luxury items and products considered harmful to public health.
Incentives for growth and relief
A significant portion of the policy focuses on removing import duties to lower operational costs in critical sectors and provide relief to vulnerable groups.
To support the agricultural sector, import duties on greenhouses have been scrapped, a move expected to enhance irrigation capabilities. In a boost to education and healthcare, duties have also been removed on essential teaching and learning equipment for community technical colleges, including sewing machines, plumbing tools and welding equipment. Additionally, heavy-duty generators exceeding 75 KVA imported by registered educational institutions and hospitals will now be duty-free.
The government has also extended relief to persons with disabilities by eliminating import duties on supportive devices such as adapted vehicles, prosthetic limbs and hearing aids. In a move to harmonise tax treatment across different faiths, duties on Bibles, Qur’ans and other religious audio materials have also been removed.
Furthermore, all raw materials used in manufacturing uniforms for security agencies will now be imported duty-free to strengthen local industry.
Targeting vices and luxury
On the other hand, the government is introducing new or increased taxes on goods considered non-essential or potentially harmful.
A new excise duty on selected luxury goods will see the rate on wristwatches jump from zero to 50 percent, while duties on perfumes and beauty products will rise from 10 to 50 percent. Excise duty on jewellery items such as necklaces, earrings and bangles will increase from 50 to 70 percent, while video game consoles will face a tax hike from 20 to 50 percent.
In a public health-related measure, a 20 percent excise tax is being introduced on powdered drink flavours such as Jolly Jus and Baks, which the MRA says have “potential negative health effects”.
The government is also targeting environmental and infrastructure concerns through a 40 percent export duty on scrap metal. The measure is intended to discourage exports and curb the vandalism of electricity cables, telecommunications infrastructure and bridges.
According to Achitabwino, owners of foreign-registered motor vehicles will also face a significantly higher carbon tax, with rates for vehicles with engine capacities above 3,000cc rising from MK15,500 to MK90,000.
A new excise tax is also being introduced on hybrid motor vehicles not exceeding eight years old, with rates ranging from 10 to 20 percent depending on engine capacity.
To protect domestic producers, import surcharges are also being introduced on a wide range of goods readily manufactured locally, including poultry, eggs, sweets, biscuits, plastic furniture and blankets. A 20 percent surcharge on imported cement is also being reintroduced.
Digitalisation drive yields results
The document also highlights significant progress in the MRA’s digital transformation agenda.
The Electronic Invoicing System (EIS), introduced in May 2026, has already contributed to a steady increase in VAT collections. Compared with the pre-EIS monthly average of MK66.73 billion, collections rose by 5.4 percent in June, 15.5 percent in July and 44.4 percent in August, reaching MK96.32 billion.
The MRA reported that 8,890 taxpayers have been onboarded onto the system, representing 98 percent of its target.
A new “Store and Forward” patch designed to address delays in issuing receipts is being piloted and is scheduled for full rollout on November 1, 2026.
Infrastructure and administration projects advance
The MRA is also making progress on several major infrastructure projects.
The Integrated Tax Administration System 2 (ITAS2) remains on schedule, with the building phase expected to start in October 2026 and final delivery targeted for March 2028.
Under the One Stop Border Posts (OSBP) project, facilities at Mchinji, Dedza and Mwanza have been completed, while work at Songwe, Muloza and Chiponde is at various stages.
A smart gate has also been installed at Mchinji Border Post to control traffic and secure goods, with procurement for a similar facility at Dedza underway.
In the property sector, 10,837 properties belonging to 970 landlords have been registered in Blantyre and Lilongwe, with the next phase of registration commencing this month.
Public reaction: A call for prudent use
Social commentator Lucky Mbewe has commended the MRA for the progress made through the Electronic Invoicing System, particularly its achievement of 98 percent of the targeted taxpayer registrations.
“This is good news, especially when you look at the target versus achievement. What this means is that the previous tax collection system was prone to abuse, thereby making government lose a lot of revenue due to the system being porous,” he observed.
Mbewe, however, appealed to the MRA and government to ensure the prudent use of taxes collected for national development.
“This is the only sure way to encourage other institutions and companies who are not registered to register without fear,” he said.
He also welcomed the removal of import duties on greenhouses, describing it as “a move in the right direction” that would help improve irrigation at a time when the country is experiencing the effects of El Niño.
On the 40 percent export duty on scrap metal, Mbewe said the measure was “long overdue as huge damage has already been done”, but expressed hope that proper implementation would help reduce vandalism of electricity and water infrastructure.
Echoing these sentiments, economist Joe Kumbuwa argued that revenue collection has never been Malawi’s main challenge, pointing instead to the abuse of public funds.
“Our challenge as a nation has never been tax collection, revenue, rather it’s the abuse of funds. Fact is MRA has always managed to beat targets these previous years,” he stressed, calling for support for the authority’s efforts.
