Malawi’s Parliament approved the 2025-26 Budget on 26 March 2025, with several tax measures.
The 2025-26 budget is estimated at MWK 8.08 trillion. The initial estimated MWK 8.5 trillion budget was adjusted before final approval.
The main tax measures of the 2025-26 budget are as follows:
Reduction in corporate tax rate
The 2025-26 budget approved reducing the corporate tax rate for non-residents with a permanent establishment in Malawi from 35% to 30%.
No import duty or excise tax on mobile phones
The government clarified that mobile phones have no import duty or excise tax. Businesses are only required to pay value added tax (VAT) and for those registered for VAT purposes.
VAT exemption on bakery items
The budget includes a VAT exemption on bread, buns, and confectioneries to support local bakeries and the food industry.
Reduction in the import duty and excise tax
The government is reducing the applicable import duty and excise tax on all materials imported to construct amusement parks.
Reduction of excise tax rates for hybrid electric vehicles (HEVs)
The government is implementing a significant reduction in excise tax rates for hybrid electric vehicles (HEVs) to promote the adoption of these vehicles. The reduced excise tax rates are as follows:
- For hybrid vehicles under 8 years old, the excise tax is reduced from 45% to 0%;
- For those 8-12 years old, the tax is decreased from 70% to 35%;
- For vehicles over 12 years old, the tax is reduced from 100% to 60%.
The tax measures will go into effect from 1 April 2025.
