Proposal for 1% VAT rise for social spend
A review of the financial position of the social protection fund has proposed to the Malawian government a Value Added Tax rise from 16.5% to 17.5%.
Such a rise would edge Malawi towards the high end of the average rate for its region in Africa:
- 16% Zambia
- 18% Tanzania
- 16% Mozambique
The proposed consumption tax rise was proposed by the Malawi Economic Justice Network (Mejn) has proposed a one percent increase in the value-added tax (VAT) to expand the social protection budget for the 2024/25 fiscal year.
National Budget analysis, aiming to extend the K232 billion allocated to social protection in the upcoming budget. According to Mejn consultant Christopher Mbukwa, this increase in VAT from 16.5 percent could secure long-term financing for social protection initiatives, currently underfunded and reliant on donor support. The proposed adjustment seeks to enhance gender equality and economic empowerment among Malawi’s most vulnerable populations.
