Cross-border trade is expected to improve, thanks to the revised Comesa Simplified Trade Regime (STR).
Malawi Revenue Authority (MRA) says the revised regime, which has seen the duty-free threshold for some goods adjusted upwards from $1 000 (about K730 000) to $2 000 (about K1.4 million) following the amendment of the Customs and Excise regulations, is a boon for the country’s cross-border trade and will possibly result in revenue increase.
STR is a trade arrangement which allows cross-border traders in the 19-member country Common Market for Eastern and Southern Africa (Comesa) trade bloc to enjoy duty-free status when they import goods originating from member States.
The amendment of STR has seen the addition of more goods and services under the arrangement, which means more products will now be exempted from duty apart from the existing agricultural products, live animals, food products, furniture, stationery and other assorted items.
In an interview on Tuesday, MRA head of corporate affairs Steven Kapoloma said the amendment follows concerns from cross-border traders on the limited goods and services as well as the previous threshold, which they claimed had lost value over time.
“The amendment will help to address the concerns that some cross-border traders had over the arrangement. We are hoping now that with the $2 000 threshold and increased list of products, businesses will increase their purchases for duty-free products which should help in reducing cost of doing business,” he said.
One of the cross-border traders plying her trade via Mchinji border, however, said despite being made aware of such arrangements, businesses have not benefited.
“I am not seeing any change because officers at the borders take advantage of our ignorance of such issues. I remember I asked about this issue, but instead of helping me, they said I should help myself. Just last week, I brought 80 cases of Super Mahewu and I was charged K59 000 while a certain woman right there, with 300 case was charged K50 000.
“I went to Blantyre port and the manager there told me that I was not supposed to pay at all, but to date, they have not refunded me yet this is business and my capital is small,” she said.
Kapoloma, however, said all border posts have information on the lists of goods under this arrangement and are being displayed in the duty stations.
Speaking on behalf of small buisnesses at a pre-budget consultation meeting in Blantyre in March, Esmie Phiri, one of the cross-border traders, said many of them are failing to grow their enterprises because of tax issues, which needed to be simplified and amended.
Unfriendly border tax regime remains one of the barriers to doing business as outlined in the 2017 Malawi Confederation of Chambers of Commerce and Industry (MCCCI) Business Climate Survey.
Malawi launched Comesa STR with Zambia and Zimbabwe in 2010 and 2012, respectively. n