Mixed views on duty-free week

Some businesses and traders have expressed partial satisfication on the duty-free week, citing inadequate time and chaotic process of clearing the goods.

The week, which run from January 23 to 29, was set aside to allow the public to import goods not exceeding $3 000 (about K2.5 million) without attracting import duty, import excise and import value added tax.

But in an interview on Monday to assess the impact of Duty-Free Week, Cross-Border Traders Association of Malawi president Steve Yohane said they have partially benefited from the initiative.

He said processing and other taxes attached to the process of importing the goods dampened the expectation and objectives of the initiative, which was one of the campaign promises of the Tonse Alliance administration.

Yohane said: “While this is a good initiative and something which if properly handled and looked into can benefit businesses, we seem not to have seen the real benefit of this as we are still taxed indirectly in the name of processing fees and others.

“We welcomed this initiative and hoped it would lessen our misery, but the actual experience was something else.”

He said the introduction of such initiatives should consider the needs and views of cross-border traders to achieve the intented outcome.

Indigenous Businesses Association of Malawi president Mike Mlombwa in an interview on Monday decried the time and lack of money for most traders.

He said: “This duty-free week came as a surprise to most businesses who did not have enough time to secure money to buy goods.

“Other than this, we were also constrained with foreign exchange glitches as it is not readily available in banks. As you know, foreign exchange is a challenge now and one has to apply in advance, so a week’s notice was not enough.”

Weighing in on the issue, Consumers Association of Malawi executive director John Kapito lamented lack of information and timing of the week, stating that people have marginally benefited from the initiative.

He said: “This was the first time to have a duty-free week in Malawi and indeeded challenges were expected.

“However, one of the biggest challenges was the choice of January when generally people have no money and this was a huge challenge.”

Kapito said personnel at the border had challenges to provide speedy and efficient clearing services.

Malawi Revenue Authority (MRA) director of corporate affairs Steve Kapoloma asked for more time, saying they are still computing data on the outcome of the duty-free week.

Among others, Business News wanted to find out how much revenue MRA has forgone and whether the initiative achieved its intended objective.

When announcing the week MRA indicated that only goods imported during the week as defined inthe Customs and Excise Act.

MRA also indicated that categories of goods were liable regardless of whether they are for commercial or personal use qualified for the duty-free.

To quality, importers were supposed to obtain required permits for specific goods from relevant authorities.

According to the Gazettee dated January 14 2022, government maintained the $3 000 goods value ceiling while limiting the cover to imports bought within the period.

MRA indicated that importers were still required to pay K15 000 processing fee and charges of engaging a clearing agent.