Malawi’s government is under mounting pressure to remove taxes applied to ICT in order to lower the cost of internet.
The ICT Association of Malawi (ICTAM) has petitioned the Ministry of Finance and Economic Affairs to review taxation policies with regards to the 2023/2024 National Budget.
ICTAM president Clarence Gama said: “We have the 15% non-residence tax on software licences and this affects the cost of operating systems sourced outside the country. We therefore urge the government to consider revising it. We also want to see the government revising the 20% withholding tax on local software developers by considering an exemption regarding their role in the country’s digital transformation agenda. Further, we want a review on excise tax on telecommunications and broadband related products which we feel will go a long way in promoting ICT services.”
The Malawi Confederation of Chambers of Commerce and Industry (MCCCI) added its voice to calls for tax reform.
MCCCI CEO Chancellor Kaferapanjira said, “We hope to see a tax structure that promotes domestic assembly, processing, manufacturing rather than promoting finished products in the computer industry. Tax waivers on technology devices can help in promoting online and electronic learning in schools.”
Malawi’s government also charges 17.5% value added tax (VAT) on mobile phones, 16.5% on internet services and 10% excise duty on messages and internet data transfers.
The Minister of Finance and Economic Affairs Sosten Gwengwe did not discuss the situation in detail and said only that the government will consider proposals.