How VAT Registration and Rates Work in Malawi

Value Added Tax (VAT) in Malawi is a consumption tax charged on goods and services. The current standard VAT rate is 17.5%.² Businesses can register for VAT either as a requirement based on their turnover or voluntarily if they wish to claim input VAT on their purchases.⁸

VAT Rate

The standard VAT rate is 17.5%.² This rate applies to imported goods as well as domestically supplied goods and services.¹ Exports are zero-rated, meaning no VAT is charged on goods sold for export.⁸

VAT Registration

Businesses with annual turnover of less than MK25 million can voluntarily register for VAT if they want to claim VAT.⁸ This allows smaller businesses to recover input VAT they have paid on purchases used in their business activities.

VAT Claims and Input VAT

Once registered for VAT, exporters can claim from the Malawi Revenue Authority (MRA) the input VAT they have paid on standard-rated supplies and zero-rated supplies.⁸ This means businesses can recover the VAT they paid when purchasing goods and services used in making their exports.

Who Gets VAT Exemptions

Certain sectors receive VAT exemptions. Investors in the tourism sector, for example, enjoy VAT exemption on imported items and on locally purchased goods including tableware, cutlery, and specially designed game viewing vehicles, provided these items are marked with the hotel’s name and the establishment meets minimum room requirements.⁶