Malawi WT/TPR/S/231/Rev.1 
 Page 15 
 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
(1) MEASURES DIRECTLY AFFECTING IMPORTS  
(i) Registration, documentation, and customs procedures 
1. Under the Customs and Excise Act, and the C ontrol of Goods Act of 1987, any person or 
entity (including non-nationals) can import goods fo r commercial purposes.  Foreigners require 
trading licences, for which they need to have eith er a business resident permit that indicates trading as 
an activity or a permanent resident permit issued by the Ministry of Home Affairs and Internal 
Security (Department of Immigration).  Malawian nationals receive trading licences from city assemblies upon application.  There are no fees for trading licences. 
2. Customs clearance for imports is a four-step proced ure.  It is mandatory for all importers to 
employ a customs broker/clearing agent.
1  Customs brokers are licensed  by the commissioner general 
of the Malawi Revenue Authority (MRA) under Sec tion 128 of the Customs and Excise Act, and are 
required to furnish MK 500,000 to  the MRA as bond.  Broker fees vary and are set by the brokers 
themselves but are regulated by the broker associations.2  The importer must provide all the required 
documentation to the customs broker/clearing agent, which includes:  the invoice, bill of lading (or 
airway bill), and if required SPS certificate, country of origin certificate, and any other permit or 
licence.3  On the basis of these documents, the cust oms broker/clearing agent prepares the Malawi 
Customs Declaration Form 12, which is a single ad ministrative document.  Form 12 is divided into 
three segments:  the general segment contains info rmation regarding the cons ignment, transporter and 
importer;  and customs office details4;  the item segment contains information regarding each item in 
the consignment, such as tariff headings, customs procedure code, and country of origin;  and the 
totals segment contains the total custom s duty for all items in the declaration. 
3. A completed and signed Form 12 is submitted by the customs broker/clearing agent to a direct 
trader input (DTI) agent, who enters the informat ion into his system (which is connected to the 
Malawi Revenue Authority (MRA) system) and the calculated customs duty, excise duty, and VAT.  The DTI agent does not charge a fee;  however a MK 1,200 processing fee is payable to the MRA.  
The customs broker/clearing agent pays the assessed ch arges to the cashier who stamps the Form 12.  
The Form 12 is then submitted to a customs offi cer, who conducts an "attempt assessment" of the 
payable charges and sends the form to the verificati on section.  If all is found to be in order the goods 
are cleared.  Any query must be answered by the customs broker/clearing agent or the importer.  Most 
queries pertain to valuation of used motor vehicles and tariff classification issues.  In the case of a 
dispute, the importer can lodge an appeal at the customs station;  if the outcome is not to the 
importer's satisfaction, the importer may appeal to the MRA head office, where a five-person internal 
appeals committee will consider the issue.  Its ru ling may be appealed in the High Court.  The 
authorities revealed that the in ternal appeals committee handles about 300 cases per year;  99% 
concern valuation of used motor vehicles. 
                                                     
 
1 Six firms are licensed to prepare declarations on their own and are exempt from hiring a customs 
broker/clearing agent as they have in-house capability for DTI and access to the MRA system. 
2 There are approximately 125 customs brokers operating in Malawi. 
3 Technical conformity certificates are required mainly  for the import of food stuffs and chemicals.  
These certificates are regula ted and certified by the Malawi Bureau of Standards. 
4 Details include the number of packages and items;  weight of the consignment;  name, address, and 
nationality of the transporter;  and name, address, and ta xpayer identification number in Malawi of the importer.  
If the importer does not have a Malawi taxpayer identification number, the MRA provides a temporary number.  
Customs office details include the code of the customs office where the goods entered or where they are to be 
cleared and the regime under which the goods are to be cleared. WT/TPR/S/231/Rev.1 Trade Policy Review 
Page 16 
 
 
4. Malawi uses UNCTAD's Automated System for Customs Data (ASYCUDA++).5  P r e -
shipment inspection was abolished in 2007.  Customs physically inspects approximately 75% of shipments.  When needed, represen tatives from the Ministry of Agriculture and Food Security, and 
the Malawi Bureau of Standards are also present at the inspection.  In this respect the MRA has set up 
a risk-management unit, which conducts risk pr ofile analyses of goods and importers.  After 
reviewing data from flexible anti-smuggling teams (FAST) and ASYCUDA, on previous offences, the 
MRA set up the selectivity criteria module under ASYCUDA.
6  Under the module, data is analysed 
and imports are categorized as high -risk (red lane), medium-risk (yellow lane), or low-risk (green 
lane).  The high-risk category is subject to comple te physical and document checks;  the medium-risk 
category is subject to just a document check;  while  low-risk imports are cleared but may need to 
undergo a post-clearance audit.  In addition, ther e is a blue lane for frequent and high volume 
importers;  these may also be subject to a post-cl earance audit.  The post-clearance audit unit was set 
up in 2008 and has conducted approximately 38 audits. 
5. The authorities state that Malawi and Mozambique  have signed letters of intent to establish a 
one-stop border post at Dedza/Calomue border, and a t ask team is in place to sort out the modalities. 
There is also a national trade fac ilitation committee, chaired by Ministry of Industry and Trade, and 
MRA is a member of the committee. 
6. Transit trade comprises only 5-10% of Malawi's trade.  The Customs and Excise Act provides 
for two mode of transit:  through transit and outw ard transit;  but administrative arrangements are in 
place only for inward transit.  For the transit to be initiated the importer must complete and submit a 
declaration form and provide a security in th e form of a cash deposit or a bond guarantee. 
(ii) Customs clearance 
7. Customs duties are normally calculated on the c.i. f. price of imported products.  According to 
the Malawi Customs and Excise Act, the c.i.f. price is the actual price paid by the importer plus the 
cost of freight and insurance.  In instances wher e customs is unable to ascertain the value, other 
valuation methods are used including reference prices of identical or similar goods (which are 
maintained in a database).7  According to the authorities, Malawi's customs valuation methods 
conform with the WTO Agreement on Customs Valuation. 
(iii) Tariffs 
(a) Applied MFN tariffs 
8. The Tariff is Malawi's main trade policy inst rument.  In 2009, customs duties accounted for 
approximately 13% of tax receipts.8 
9. The overall tariff structure in Malawi is complex to administer.  The tariff comprises six 
bands:  duty free, 5%, 7.5%, 10%, 20%, and 25% (Malawi's 2000/01 applied MFN tariff also 
                                                      
5 Out of the 29 border stations, 11 have ASYCUDA;  these 11 stations handle over 95% of Malawi's 
trade. 
6 The MRA developed 13 national criteria based on past offences data, these included goods imported 
under  Malawi customs procedures codes 430,478,442,491 and 492.  Other high risk commodities are:  textiles, 
wines and spirits, motor-vehicle spare parts, electronics, footwear, and goods destined for bonded warehouses. 
7 The first alternative valuation method is the tran saction value of identical products, followed by the 
transaction value of similar goods;  the deductive value;  the computed value;  and the fall-back method. 
8 Customs duties, VAT and excise duties on imports  accounted for 42% of GD P (information provided 
by authorities). Malawi WT/TPR/S/231/Rev.1 
 Page 17 
 
 
comprised six bands).  All tariffs are applied on an ad valorem  basis.  The 2009 tariff comprises 
5,436 lines at the HS 8-digit level and is based on the HS-2002 nomenclature. 
10. The average applied MFN tariff in 2009/10 was 13.1%, slightly lower than in 2001 (13.6%) 
(Table III.1).  During the period under review, customs duty on many capital goods and inputs has 
been eliminated as part of invest ment incentives.  The majority of tariff lines are not bound, giving the 
authorities considerable scope to raise tariffs, ther eby imparting a significant level of unpredictability 
to the tariff.  Nearly 60% of the applied MFN tariffs range between 10% and 25%.  The modal or 
most common duty is 25% (Chart III.1). 
Table III.1 
Structure of the MFN tariff, 2009 
(Per cent) 
  2009 U.R. 
1. Bound tariff lines (% of all tariff lines) 31.2 n.a. 
2. Duty-free tariff lines (% of all tariff lines) 14.0 0.0 
3. Non- ad valorem  tariffs (% of all tariff lines)b 0.0 0.0 
4. Tariff quotas (% of all tariff lines) 0.0 0.0 
5. Non- ad valorem  tariffs with no AVEs (% of all tariff lines) 0.0 0.0 
6. Simple average tariff rate 13.1 76.5 
 Agricultural products (WTO definition)a 17.3 121.5 
 Non-agricultural products (WTO definition)b 12.5 42.5 
 Agriculture, hunting, forestry and fishing (ISIC 1) 16.3 106.4 
 Mining and quarrying (ISIC 2) 9.1 30.0 
 Manufacturing (ISIC 3) 13.0 70.0 
7. Domestic tariff "spikes" (% of all tariff lines)c 0.0 0.0 
8. International tariff "peaks" (% of all tariff lines)d 39.6 100.0 
9. Overall standard deviati on of applied rates 10.0 41.1 
10. "Nuisance" applied rates (% of all tariff lines)e 0.0 0.0 
 
n.a. Not applicable. 
 a WTO Agreement on Agriculture definitions. b Excluding petroleum. 
c Domestic tariff spikes are defined as those exceeding three times the overall simple average applied rate (indicator 6). 
d International tariff peaks are defined as those exceeding 15%. e Nuisance rates are those greater than zero, but less than or equal to 2%. 
 
Source:  WTO Secretariat calculations, based on data provided by the authorities of Malawi;  and IDB WTO database. 
11. According to the WTO sectoral definition, av erage tariffs for agricultural products were 
higher than those for non-agricultural products;  th e respective rates in 2009 were 17.3% and 12.5% 
(Table III.1).  The average tariff for agricultural im ports has increased from the level in 2001 (15.2%), 
while the average applied rate for non-agricultural products has decreased (13.3%).  Duty-free items 
include:  specified animal products, certain cerea ls, pharmaceutical goods, fertilizers, certain mineral 
fuels, most capital goods, and specified printed ma tter.  The 5% tariff rate is applicable to 
"necessities" comprising foodstuffs and raw materials.   Higher rates are imposed on other industrial 
goods and "non-essential" consumer  goods.  However, customs duties on agricultural products 
considered to be essential, such as wheat flour, were  increased to 5% in 2007 to encourage domestic 
production, while the tariff rate on vegetables, meat o ffal, fish, milk (in granules), coffee, tea, nuts, 
and spices was raised to 25% in 2009.  According to  the authorities, the rationale for increasing these 
tariffs is to protect domestic industry. 
 WT/TPR/S/231/Rev.1 Trade Policy Review 
Page 18 
 
 
(0.0)(18.5)
(0.0)(27.8)
(14.0)
(0.1)(39.4)
05001,0001,5002,0002,5003,0003,500
0.0 5.0 7.5 10.0 13.0 20.0 25.00102030405060708090100
The figures in brackets correspond to the percentage of total lines. 
WTO Secretariat calculations, based on data provided by the Malawi authorities.Chart III.1
Breakdown of tariff rates, 2009
Number of tariff lines
Note:
Sourc e:Percentage
Number of lines 
Cumulated percentage (right-hand scale)
 
12. Potential efficiency losses can arise due to th e dispersion of the tariff rate across product 
lines.  The greater the differentials in tariff rates,  especially within groups of like-products and thus 
substitutable products, the greater the chance that  producer and consumer decisions would be 
distorted by the tariff structure.  The implication is that very similar goods are taxed at significantly 
different rates, thereby increasing the complexity of the tariff structure and thus increasing the risk of 
misclassification and tax evasion.  The overall standa rd deviation of the tariff rates increased from 
9.3% in 2001 to 10% in 2009, indicating increas ed dispersion;  nonetheless, dispersion remains 
moderate with a 0.8 coefficient of variation (Table III.2). 
Table III.2 
Summary analysis of the MFN tariff, 2009  
  Applied 2009 rates  
Analysis No. of lines Simple avg. 
tariff (%) Range tariff 
(%) Std-dev 
(%) CV Imports 2008
(US$ million)
Total 5,436 13.1 0-25 10.0 0.8 2,203.7 
             
HS 01-24 787 18.2 0-25 9.0 0.5 265.5 
HS25-97 4,649 12.3 0-25 9.9 0.8 1,938.2 
By WTO definitiona             
Agriculture 729 17.3 0-25 9.4 0.5 269.1 
Live animals and products thereof 91 16.7 0-25 7.7 0.5 1.6 
Dairy products 20 20.5 10-25 7.1 0.3 10.8 
Coffee and  tea, cocoa, sugar, etc. 135 21.6 0-25 7.4 0.3 23.8 
Cut flowers and plants 32 7.6 0-25 8.7 1.2 0.7 
Fruit and vegetables 162 23.9 10-25 3.9 0.2 4.4 
Table III.2 (cont'd)Malawi WT/TPR/S/231/Rev.1 
 Page 19 
 
 
  Applied 2009 rates  
Analysis No. of lines Simple avg. 
tariff (%) Range tariff 
(%) Std-dev 
(%) CV Imports 2008
(US$ million)
Grains 16 5.0 0-10 5.2 1.0 84.1 
Oil seeds, fats, oils and their products 72 10.3 0-25 10.3 1.0 59.7 
Beverages and spirits 46 21.4 0-25 7.0 0.3 3.0 
Tobacco 42 22.5 10- 25 5.7 0.3 74.0 
Other agricultural products 113 8.1 0-25 6.1 0.7 7.1 
Non-agriculture (excl. petroleum) 4,693 12.5 0-25 9.9 0.8 1,934.6 
Fish and fishery products 126 17.5 0-25 7.7 0.4 1.8 
Mineral products, precious stones and 
     precious metals 343 11.8 0-25 8.8 0.7 443.7 
Metals 625 10.9 0-25 6.9 0.6 108.8 
Chemicals and photographic supp lies 871 6.8 0-25 6.6 1.0 244.0 
Leather, rubber, footwear and travel 
    goods 168 19.2 0-25 8.3 0.4 35.7 
Wood, pulp, paper and furniture 268 13.8 0-25 9.0 0.7 156.3 
Textiles and clothing 827 20.3 0-25 8. 2 0.4 77.9 
Transport equipment 163 11.5 0-25 10.5 0.9 355.4 
Non-electric machinery 583 5.9 0-25 9.4 1.6 139.5 
Electric machinery 300 12.2 0-25 10.7 0.9 95.1 
Non-agricultural articles n.e.s. 419 16.9 0-25 10.5 0.6 74.4 
By ISIC sectorb       
Agriculture, hunting, forestry and 
    fishing 320 16.3 0-25 9.8 0.6 165.5 
Mining 98 9.1 0-25 3.4 0.4 7.7 
Manufacturing 5,017 13.0 0-25 10.1 0.8 2,030.5 
By stage of processing       
Raw materials 666 13.6 0-25 8.7 0.6 200.3 
Semi-processed products 1,709 10.3 0-25 8.4 0.8 631.2 
Fully-processed products 3,061 14.6 0-25 10.8 0.7 1,372.2 
 
a Does not take into account 14 tariff lines on petroleum products. 
b International Standard Industrial Classification (Rev.2).  Electricity, gas, and water are excluded (1 tariff line). 
 
Note: CV = coefficient of variation. 
 
Source : WTO Secretariat estimates, based on data provided by  the authorities of Malawi;  imports data from UNSD, 
Comtrade database. 
13. In aggregate, Malawi's tariff structure displa ys mixed escalation:  the average applied MFN 
tariff in 2009 was 13.6% on raw materials;  10.3%  on semi-processed products,  and 14.6% on fully 
processed products (Table III.2).  However at a more disaggregated (ISIC two-digit) level, the tariff 
displays positive escalation in the industries of f ood and beverages, textiles and apparel, and wood 
products.  Other industries display mixed escalation (generally negative for the first to the second 
stage of processing and positive to the third stage) (Chart III.2). 
14. In industries that display positive escalation, th e effective rate of protection is high and may 
result in inward orientation of production.  On the other hand where there is mixed escalation, the 
negative part may result in loss of competitiven ess with respect to semi-processed products. WT/TPR/S/231/Rev.1 Trade Policy Review 
Page 20 
 
 
0.05.010.015.020.025.030.0Chart III.2
Tariff escalation by ISIC 2-digit industry, 2009
Sourc e: WTO Secretariat estimates, based on data provided by the Malawi authorities.
All products
Food,
beverages
Textiles,
apparel
Wood products
Paper, printing
Chemicals ,
plastics
Non-metalli c
minera l
products
Basic meta l
products
Fabricated meta l
products
Other
manufacturin gNOT APPLICABLEAgriculture
MiningRaw materials Semi-processed Fully processedNOT APPLICABLEPer cent
 
(b) Tariff bindings 
15. Malawi has bound 31% (Table III.1) of its tariff lines:  the entire agriculture tariff is bound 
and approximately 20% of the non-agriculture tariff.   The average bound rate for all goods is 76.5%.  
The average bound rate is 121.5% for agricultu ral goods and 42.5% for non-agricultural goods. 
(c) Tariff exemptions and concessions 
16. Many industries and products benefit from duty and tax (VAT and excise) concessions in the 
form of suspensions, rebates, remissions, and refunds, under the Customs and Excise Act.9  Revenue 
forgone due to exemptions and concessions was MK  15 billion in 2008/09.  The mandate for granting 
or withdrawing suspensions, rebates, remissions or  refunds of customs duty lies with the parliament 
and the Government, which publishes these in the Government Gazette .  The Malawi Revenue 
Authority implements these decisions.  Tariff rebates are provided to registered manufacturers for raw 
material imports destined for inputs in specified  end-use industries.  Registered manufacturers are 
required to keep necessary documentation such as m onthly returns, which show that the imported 
inputs have been used in the specified industry.  Fu rthermore, for certain specified industries, rebate 
of excise taxes is also allowed;  such rebates are applied to total production, including that sold on the 
                                                      
9 These include industrial rebates for customs duty, excise duty, and duty drawbacks, which are 
detailed in the Eighth Schedule of the Customs Schedule. Malawi WT/TPR/S/231/Rev.1 
 Page 21 
 
 
domestic market.  Certain imports are also VAT exempt or zero rated.10  However, no industry 
receives a rebate for petroleum products. 
17. Goods imported under the Investment Promotion Ac t or by enterprises with EPZ status, also 
benefit from tariff exemptions.  Furthermore, th e Minister of Finance and Economic Planning may 
also approve tariff rebates on goods deemed to be in the public interest.  Imports by SOEs and goods 
used in government contracts may be imported dut y free, under specific customs procedures identified 
in the Customs and Excise Order. 
18. The rationale for the numerous concessions other than drawback for exporters, is not clear.  
Many of the eligible materials may only be used  as inputs and are not final consumption goods;  
therefore the MFN tariff rate could be reduced to zer o.  This would ensure that all importers using the 
product would receive the same zero tariff rate and eliminate the need for sp ecial customs processing, 
which may delay clearance.  In the absence of clear  criteria and administrative procedures, as well as 
the selection of eligible uses, these end-use tariff c oncessions, are discretionary and ad hoc in nature, 
which could lead to distortions, by discriminating between manufacturers, as well as making the tariff 
structure more complex.  The discretionary nature of the exemptions also leaves room for corruption. 
(d) Tariff preferences 
19. Malawi accords tariff preferences to members of COMESA and SADC.  Under COMESA 
preferences, Malawi extends coverage to 3,794 tariff lines, and the average applied tariff under 
COMESA is 4.3% (Table III.3).  The COMESA FT A has 11 members, and trade between them is 
duty free;  the 4.3% average applied tariff applies to the remaining 8 members of COMESA that are 
not yet part of the FTA.  With regard to SADC, imports from South Africa may be imported at 
preferential rates;  coverage extends to 1,560 lines,  and the average applied tariff is 10.2%.  For the 
other SADC countries, preferential tariffs extend to  3,309 tariff lines, while the average applied tariff 
is 7.8%. 
Table III.3 
Summary analysis of MFN and preferential tariffs, 2009  
2009 applied rates COMESAa SADC South Africa 
Analysis No. of 
lines Simple 
avg. tariff 
(%) Range 
tariff 
(%) Simple 
avg. tariff 
(%) Range 
tariff 
(%) Simple 
avg. tariff 
(%) Range 
tariff 
(%) Simple 
avg. tariff 
(%) Range 
tariff 
(%) 
Total 5,436 13.1 0-25 4.3 0-20 7.8 0-25 10.2 0-25 
HS01-24 787 18.2 0-25 4.5 0-18 14.1 0-25 14.1 0-25 
HS25-97 4,649 12.3 0-25 4.2 0-20 6.8 0-25 9.6 0-25 
By WTO definitionb                   
Agriculture 729 17.3 0-25 4.7 0-18 14.6 0-25 14.8 0-25 
Live animals and products 
thereof 91 16.7 0-25 2.7 0-6 12.2 0-25 12.5 0-25 
Dairy products 20 20.5 10-25 4.0 0-6 15.3 5-25 16.0 10-25 
Coffee & tea, cocoa, sugar, etc. 135 21.6 0-25 6.2 0-18 20.2 0-25 20.4 0-25 
Cut flowers and plants 32 7.6 0-25 2.8 0-12 5.2 0-25 5.2 0-25 
Fruit and vegetables 162 23.9 10-25 6.0 0-12 20.2 10-25 20.3 10-25 
Grains 16 5.0 0-10 0.0 0-0 5.0 0-10 5.0 0-10 
Table III.3 (cont'd)
                                                      
10 VAT-exempt or zero-rated goods and services are listed in the First and Second schedules of the 
VAT Act of 2005 respectively.  For zero-rated items the consumer files a tax return and claims a refund for the 
full amount.  Filing is for record-kee ping purposes.  Refunds are norm ally processed within a month. WT/TPR/S/231/Rev.1 Trade Policy Review 
Page 22 
 
 
2009 applied rates COMESAa SADC South Africa 
Analysis No. of 
lines Simple 
avg. tariff 
(%) Range 
tariff 
(%) Simple 
avg. tariff 
(%) Range 
tariff 
(%) Simple 
avg. tariff 
(%) Range 
tariff 
(%) Simple 
avg. tariff 
(%) Range 
tariff 
(%) 
Oil seeds, fats, oils, and their 
products 72 10.3 0-25 2.1 0-12 9.3 0-25 9.3 0-25 
Beverages and spirits 46 21.4 0-25 5.9 0-14 20.2 0-25 20.4 0-25 
Tobacco 42 22.5 10-25 9.9 0-13 22.5 10-25 22.5 10-25 
Other agricultural products 113 8.1 0-25 3.1 0-12 3.8 0-25 4.2 0-25 
Non-agriculture (excl. petroleum) 4,693 12.5 0-25 4.2 0-20 6.8 0-25 9.5 0-25 
Fish and fishery products 126 17.5 0-25 2.2 0-12 4.2 0-25 3.4 0-25 
Mineral products, precious 
stones, and precious metals 343 11.8 0-25 3.8 0-12 6.5 0-25 11.1 0-25 
Metals 625 10.9 0-25 2.4 0-13 6.1 0-25 8.6 0-25 
Chemicals and photographic 
supplies 871 6.8 0-25 4.0 0-12 2.3 0-25 3.7 0-25 
Leather, rubber, footwear, and 
travel goods 168 19.2 0-25 4.1 0-12 14.2 0-25 18.7 0-25 
Wood, pulp, paper, and furniture 268 13.8 0-25 3.7 0-12 10.1 0-25 13.4 0-25 
Textiles and clothing 827 20.3 0-25 5.6 0-20 9.5 0-25 11.6 0-25 
Transport equipment 163 11.5 0-25 2.9 0-13 9.8 0-25 10.1 0-25 
Non-electric machinery 583 5.9 0-25 2.4 0-13 3.4 0-25 5.8 0-25 
Electric machinery 300 12.2 0-25 6.4 0-13 7.2 0-25 12.2 0-25 
Non-agricultural articles n.e.s. 419 16.9 0-25 7.4 0-13 11.0 0-25 16.1 0-25 
By ISIC sectorc          
Agriculture, hunting, forestry, 
and fishing 320 16.3 0-25 3.2 0-12 10.4 0-25 10.8 0-25 
Mining 98 9.1 0-25 1.7 0-4 3.5 0-15 6.8 0-25 
Manufacturing 5,017 13.0 0-25 4.4 0-20 7.8 0-25 10.2 0-25 
By stage of processing          
Raw materials 666 13.6 0-25 2.8 0-14 7.5 0-25 8.6 0-25 
Semi-processed products 1,709 10.3 0-25 3.8 0-19 5.7 0-25 6.7 0-25 
Fully-processed products 3,061 14.6 0-25 4.8 0-20 9.1 0-25 12.5 0-25 
 
a Eleven COMESA members have already joined the FTA and trad e between them is duty free. 
b Fourteen tariff lines on petroleum products are not taken into account. 
c International Standard Industrial Classification (Rev.2).  Electricity, gas, and water are excluded (1 tariff line). 
 
Source : WTO Secretariat estimates, based on data provided by the authorities of Malawi. 
(iv) Rules of origin 
20. Malawi maintains both non-preferential and pref erential rules of origin for the purpose of 
levying import duties.  Goods or products are considered to originate from the country where they are 
grown, wholly produced or substantially transf ormed.  Under the Customs and Excise Act, the 
country or origin for manufactured goods is deemed to be the last place of processing, and at least 25% of the content needs to be sourced from the country of origin. 
21. Malawi applies preferential rules of origin to goods covered by its regional and bilateral 
agreements.  For COMESA countries, any of the fo ur following criteria must be met for the imported 
goods to be eligible for preferential treatment:  goo ds are completely produced in the region;  the 
import content of goods is less than 60% of the c.i. f. value of the total cost of materials used in 
production;  goods contain not less than 35% ex-factory value added
11, reduced to 25% if the final 
                                                      
11 "Value added" is defined as the difference between the ex-factory cost of the finished products and 
the c.i.f. value of material inputs imported from outside the COMESA sub-region. Malawi WT/TPR/S/231/Rev.1 
 Page 23 
 
 
product is considered to be of "particular importance" to the economic development of a member 
state12;  or there is a change of tariff classi fication heading following transformation. 
22. SADC rules of origin have been negotiated on a country-by-country and product-by-product 
basis.  Thus, they are complicated and apply differe nt origin criteria across products.  According to 
the authorities, the principle for the application of rules is the same as for COMESA.  However, for 
certain tariff lines it is product specific, as originatin g conditions differ from one chapter to another.  
The authorities have stated that discussions are under way to resolve this. 
(v) Other duties and taxes 
23. In addition to tariffs, imports are subject to VAT and excise duties.  The VAT, which is a 
consumption tax, applies to most goods at a rate of 16.5%.13  Many services, including professional 
services, infrastructure (building, electrical and pl umbing), electricity, telecommunications, television, 
computer, financial, hotel accommodation and restaura nts, and transportation are also subject to VAT 
at 16.5%.  The VAT applies at the same rate for imports and domestically produced goods.  On 
imports the tax is applied on the duty inclusive c.i.f.  price.  However, many intermediate and capital 
goods and essential food items and medicines are exempt.14  The VAT applies to 4,528 tariff lines, 
while 546 tariff lines are exempt.  VAT on imports accounted for 18.9% of tax revenue in 2008.15 
24. Certain imported and domestic products are also subject to an excise duty, which is applied 
on an ad valorem  basis.  The number of tariff lines subject to excise duty increased to 1,079 during 
the period under review.  Excise duty varies from zer o to 90% (certain tobacco products).  The 
rationale for certain duties is unclear:  most vegeta bles and certain apparel are subject to an excise 
duty of 20%, while many automobiles are taxed at a lo wer rate.  The authorities stated that the excise 
duty on vegetables and apparel w as for revenue-generating purposes.  Excise duty on imports 
accounted for 11.4% of total revenue in 2008.16 
(vi) Import prohibitions, restrictions, and licensing 
25. Malawi imposes licensing requirements for certain products.  The import licensing regime is 
governed by the Control of Goods Act of 1987 and administered by the Ministry of Industry and 
Trade.  Automatic and non-automatic licensing proce dures are maintained for health, safety, security 
and environmental reasons, and to protect infant industries (Table III.4).17 
26. Import licensing applies to specific goods regardless  of origin.  For an automatic licence, the 
importer needs to provide, inter alia , the product specification, and a proforma invoice (for salt only, 
to check iodine content).  Licences are issued on the spot free of charge.  The licence is valid for three 
months (but can be extended);  it is non-transferable and there is no  penalty for non-use of a licence or 
a portion of a licence.  For agricultural products, the importer needs approval from the Ministry of Agriculture and Food Security, and the Ministry of Industry and Trade before a licence is issued.  The 
procedure for obtaining a non-automatic licence is th e same as that for an automatic licence.  If the 
                                                     
 
12 A wide list of approved products is specified in the COMESA Treaty as being of particular 
importance to the economic development of the members. 
13 The VAT rate was reduced from 20% to 16.5% during the review period. 
14 VAT-exempt or zero-rated goods and services are listed in the First and Second schedules of the 
VAT Act of 2005, respectively. 
15 Information provided by the authorities. 
16 Information provided by the authorities. 
17 WTO document G/LIC/N/3/MWI/2, 3 October 2006. WT/TPR/S/231/Rev.1 Trade Policy Review 
Page 24 
 
 
application is rejected the applicant may submit an appeal to the Ministry of Industry and Trade for 
reconsideration. 
27. A number of products are subject to import prohibition for SPS reasons (section (viii)(b)). 
Table III.4 
Licensing requirements 
Products Kind of 
licensing Rationale for 
licensing 
Clothing and uniforms, designed for military, naval, air force or po lice use Non-automatic Security 
Radioactive substances Non-automatic Environmental 
protection 
Mist nets for the capture of wild  birds Non-automatic Environmental 
protection 
Wild animals, wild animal trophies and wild animal products, (including birds and reptiles) 
and any egg produced by such birds or reptiles Non-automatic Environmental 
protection 
Live fish, including the eggs and spaw n thereof Non-automatic Environmental 
protection 
Compound products containing flour, meal resi dues and other preparations of any kind 
suitable only for use as animal foodstuffs a nd excluding chemical additions to animal 
foodstuffs;  antibiotic growth stimulants;  in ert fillers;  trace elements;  synthetic animal 
foodstuffs;  bird seed; and cat and dog foods Non-automatic Public health 
Eggs of poultry, whether in shell, pulp or dried form s; eggs of wild birds Non-automatic Public health  
Live poultry, including day-old-chicks  Non-automatic Public health  
Meat, except tinned meat, potted meats, meat soups , meat pastes, edible meat fats, tallow and 
all cooked or cured meats other than cooked pork, ham and bacon Non-automatic Public health  
Dieldrin Non-automatic Environmental 
protection 
Aldrin Non-automatic Environmental 
protection 
Kitchen and table salt Non-automatic Public health  
Cane sugar Non-automatic Infant industry 
protection 
Wheat flour Non-automatic Infant industry 
protection 
Fertilizers Non-automatic Safety 
Steri milk Non-automatic Infant industry 
protection 
 
Source:  WTO document G/LIC/N/3/MWI/2, 3 Oc tober 2006, and information provided by the authorities of Malawi. 
(vii) Anti-dumping, countervailing, and safeguard measures 
28. Malawi's anti-dumping legislation is contained in the Customs and Excise Act (Cap. 42:01).  
The Minister of Finance and Economic Planning ma y impose anti-dumping duties, if an investigation 
(sanctioned by the Minister) finds that "dumped" imports are causing harm to domestic industry and 
the imposition of the duty is in "public interest".  The legislation allows for anti-dumping measures to 
be taken against six forms of dum ping referred to as ordinary, sales, bounty, freight, exchange, and 
surcharge.18 
29. There is no safeguard legislation in Malawi. 
                                                      
18 For details of these types of dumping and calculation of duties see WTO documents WT/TPR/S/96, 
9 January 2002, and G/ADP/N/1/MWI/1/Corr.1, 19 February 1996.  "Surcharge" dumping is where goods are 
exported, and the price paid by the exporter for raw or manufactured materials is below the price at which these 
materials would be otherwise exported. Malawi WT/TPR/S/231/Rev.1 
 Page 25 
 
 
30. According to the authorities, Malawi is in th e process of drafting new legislation that would 
address anti-dumping, countervailing duties, and safeguard measures. 
(viii) Standards and other technical requirements 
(a) Standards, testing, and certification 
31. Malawi's standardization body, the Malawi Bu reau of Standards (MBS), was established in 
1972 by an Act of parliament.  Its responsibilities include standards development and conformity 
assessment with the objective, inter alia , of facilitating domestic and international trade.  The 
Ministry of Industry and Trade acts as the TBT na tional notification authority and the MBS is the 
TBT national enquiry point.  Malawi has not made a ny TBT notifications since its last review, while it 
has recently raised a tobacco-related trade concer n in the TBT Committee (Chapter IV(1)(ii)(b)).  
Malawi is a member of the International Orga nization for Standardization (ISO), the African 
Organization for Standardization (ARSO) and an affiliate country member of the International 
Electrotechnical Commission (IEC).  It also participates in SADC and COMESA initiatives on standardization. 
32. The formulation procedure for national standard s (Malawi standards) has not changed during 
the review period.
19  Technical committees (39) consider the adequacy of international norms or the 
need for Malawi to develop its own standards.  Most standards concern technical specifications and 
are based on international norms; otherwise they are generally based on those of South Africa.  
Malawi has promulgated 690 MBS standards, up from 256 in 2000, of which 481 are mandatory.20  
Under the Malawi Bureau of Standards Act, mandato ry standards can be imposed to protect safety, 
health, and the environment or for reasons of economic importance at the national level.21  Standards 
are declared mandatory, on recommendation of the Malawi Standard Board, through an announcement by the Minister of Industry and Trade in the Government Gazette .
22  The ministerial 
order is considered a legal instrument.  Capacity co nstraints, such as inadequate testing facilities, may 
cause substantial delays between the introduction of standards and the date they become mandatory.  
Furthermore, only 44% of mandato ry standards are implemented through conformity assessment and 
certification procedures due to lack of testing equipment and testing facilities. 
33. To ensure conformity of imported goods with t echnical requirements, the Malawi Bureau of 
Standards operates the Import Quality Monitori ng Scheme (IQMS).  Local goods and services 
covered by mandatory standards are monitore d for compliance under the Permit and Designation 
Scheme.  Goods that are compliant are certified and allowed to use a quality mark, while for services, 
a service mark (Designation Certificate) is issued.  Under the Permit and Designation Scheme, 
manufacturers of goods and service providers covere d by mandatory standards are monitored on site 
for compliance at least four times in a year.  The Permit and Designation Scheme  is equivalent to the 
IQMS.  Fees are set on a cost-recovery basis.  The fee for an import/export quality certificate is 
approximately US$40.  Additional costs relate to inspection, sampling, and testing fees, which vary 
from one product to another, but are the same for imported and locally produced goods. 
34. The Import Quality Monitoring Scheme covers products designated in a list that is updated 
from time to time and published in the O fficial Gazette  and local print media.  The list is based on 
                                                      
19 For details see WTO document WT/TPR/S/96, 9 January 2002. 
20 MBS online information.  Viewed at:  h ttp://www.mbsmw.org/publications/CATALOGUE_OF 
_MBS.pdf. 
21 The "economic importance" criterion is rarely used; it covers industries considered to have a 
significant export potential, or that employ substantial labour or have high local content in their production. 
22 Malawi Standards (Effective Dates) Order, 1999. WT/TPR/S/231/Rev.1 Trade Policy Review 
Page 26 
 
 
established Malawi standards and on consumer saf ety.  Items presently covered include:  food 
products, engineering products, electrical goods, fe rtilizers, cement, PVC pipes, hand pumps, beer, 
and paints.  Each import consignment is inspected a nd products sampled at the border or at an inland 
facility (by arrangement).  An import batch certif icate is issued for conforming goods.  If four 
consecutive import consignments of the same produc t from the same manufacturer are compliant, an 
annual import quality certificate is issued;  this waives the import quality monitoring fees for a year 
but the products continue to be monitored th rough scheduled market surveys for continued 
compliance.23  If random sampling in the domestic mark et reveals non-conformity, certificates are 
revoked and the imports concerned mu st be withdrawn from the market. 
35. Conformity assessments from accredited forei gn testing bodies are recognized in Malawi.24  
Malawi is in the process of putting in place form al mutual recognition agreements with overseas 
standards bureaux.25  Imports that are not covered by an agreement are inspected.  A pre-shipment 
sample from the manufacturer is required for testing in  Malawi, the shipment may also be inspected to 
ensure compliance.  However, the MBS does not have any accredited laboratories to assess 
conformity with its technical regulations, but efforts are being made to obtain accreditation.26 
36. On request, the MBS certifies exports for comp liance with technical requirements under its 
Export Quality Certification Scheme.27  The authorities noted that a draft standard that would cover 
imports of second-hand vehicles has been pr epared and is undergoing public review. 
(b) Sanitary and phytosanitary (SPS) requirements 
37. SPS requirements have remained largely unchang ed during the period under review.  Existing 
legislation is outdated;  however,  a draft food law is currently be ing reviewed.  Responsibilities for 
food safety are split between various institutions, notably the Ministry of Agriculture, the Ministry of Health; the Malawi Bureau of Standards, the Pharmacy, Medicines and Poisons Board, and the 
Pesticides Control Board.  Veterinary and phyt osanitary measures are the responsibility of the 
Ministry of Agriculture.  The designated SPS enqui ry points are the Malawi Bureau of Standards 
(food safety), the Department of Animal Health a nd Livestock Development (animal health), and the 
Bvumbwe Agricultural Research Station (plant hea lth).  The Ministry of Industry and Trade is 
Malawi's SPS notification authority.  Malawi is a member of the Codex Alimentarius, the OIE, and 
the International Plant Protection Convention. 
38. Food standards are the responsibility of the Malawi  Bureau of Standards.  Malawi generally 
lacks facilities and laboratory equipment to test pro ducts for import and export.  Therefore, 95% of 
Malawi's food standards are based on Codex Alimentarius, while the remainder are based on 
standards from other countries, such as South Africa.  Dairy exporters, for example, rely on foreign 
laboratories.
28  Aflatoxin testing (e.g. of groundnuts and maize), is carried out in Malawi.  Malawi 
does not permit imports of genetically modified (GM) plants or foods.  Imports of poultry or any other 
                                                      
23 To renew the annual import quality certificate, two consecutive consignments are inspected and 
sampled for continued compliance.  MBS inspectors stationed at border stations carry out the inspections and 
sampling. 
24 Foreign testing bodies need to be accredited by the International Laboratory Accreditation 
Cooperation. 
25 These include standards bureaux from Kenya, Zambia, Zimbabwe and South Africa. 
26 The authorities state that they are in the process of having la boratories and IQMS certificates 
accredited to the relevant ISO standards bu t that this is a three-year process. 
27 Export products tested and certif ied include tea, tobacco, peas, chillies, macadamia nuts, oilseeds, 
hides and skins, cashew nuts, and rice. 
28 World Bank (2009c). Malawi WT/TPR/S/231/Rev.1 
 Page 27 
 
 
meat that has been treated with growth hormones are prohibited as there is no legislation allowing for 
GM imports, and the authorities are not clear about the impact of such products.  However, during the famine in 2005, Malawi accepted GM maize from the United States but required it to be milled before 
distribution.  All food imports are inspected at the border. 
39. The Department of Animal Health and Liv estock Development (Ministry of Agriculture) 
administers veterinary and livestock legislation, through the Control and Diseases of Animals Act of 1967, the Meat and Meat Products Act, the Milk and Milk Products Act of 1971, Slaughter of Animals Act of 1971, Hides and Skin Trade Act of  1971, and the Veterinary and Para-veterinary 
Practitioners Act of 2006.  Imports of  live animals and animal products  require a permit issued by the 
Chief Veterinary Officer; they must also be certified as disease-free.
29  If imported from a disease-free 
country the quarantine requirement is waived;  all other live animal imports are required to undergo a 
28-day quarantine before entering Malawi.  Malawi  applies temporary import restrictions, including 
bans, on imports of animals and animal products from countries known to have certain diseases.  
Imports may resume after six months of disease-free status.  Malawi has made little use of the procedures of the WTO SPS Committee, to notify its emergency and other SPS measures:  its last 
notification to the Committee dates from 2001.
30 
40. Phytosanitary measures are based on the Plant Protection Act of 1969 and administered by the 
plant quarantine service.  Imports of all seeds, plan ts, and plant material are subject to quarantine 
requirements and inspections and must be accompan ied by a phytosanitary certificate and an import 
permit issued by the plant quarantine service.31 
41. Imports of grapes, apples, peaches, plums, p ears, citrus, bananas, pumpkins, gourds, and 
strawberries from countries other than Africa, th e European Union, and North America, are 
prohibited.  Imports of Irish potato, except from sout hern African countries, are prohibited. Imports of 
flower bulbs for propagation, except from southern  Africa, the Netherlands, Germany, the United 
Kingdom, Israel, North America, Australia, and New Zealand, are prohibited.  Seeds for sowing tea 
are also prohibited, except from sub-Saharan African countries;  as are rubber seeds from tropical 
America;  and passion fruit from Australia and New Zealand.  However, the reason for these 
prohibitions is not clear.  Tobacco-leaf imports from outside of Africa and all countries where 
Peronospora tabacina  occurs are also prohibited. 
42. The plant quarantine service al so administers the Pesticide Act of 2000, under which the 
Pesticide Control Board at the Bvumbwe Research Station registers and issues import permits for 
pesticides.  It also regulates the use of pestic ides in agricultural production, including for tea and 
tobacco.  The Pesticide Control Board does not have  its own standards but uses International Plant 
Protection Convention (IPPC) guidelines instead. 
43. The Pharmacy, Medicines and Poisons Board h as responsibility for registering and licensing 
medicines, pharmacy business, and poisons, excep t pesticides.  The board does not regulate 
pharmaceutical prices.  The board is authorized to  issue compulsory licences for the manufacture of 
pharmaceuticals in Malawi. 
44. Malawi is participating in initiatives to harmonize SPS measures among SADC members.  
Article 16 of SADC Trade Protocol calls for the establishment of an SADC SPS Coordinating 
Committee and of National Committees on SPS measures.   Malawi is in the process of transforming 
                                                      
29 The permits detail the source of the goods, dis ease status, validity and, in the case of animal 
products, wholesomeness.  The permit fee is MK 5,000. 
30 WTO document G/SPS/N/MWI/1, 8 January 2001. 
31 The phytosanitary certificate costs MK 500, while the import permit costs MK 250. WT/TPR/S/231/Rev.1 Trade Policy Review 
Page 28 
 
 
its National SPS Committee into a coordinating committee in accordance with SADC requirements.32  
SPS-related initiatives include a Project of Region al Integration (PRINT) in the SADC livestock 
sector;  the Food Safety Project, with the focus on re sidue control;  strengthening institutions for risk 
management of trans-boundary animal diseases;  and the SADC Foot-and-Mouth Disease Project. 
(c) Marking, labelling, and packaging 
45. Labelling requirements for pre-packaged food so ld domestically are specified in a mandatory 
national standard.  This mainly follows the Codex Alimentarius requirements.  Pre-packaged food 
products must be labelled in English and/or the local language, "Chichewa", and clearly show the 
expiry date and ingredients.  In addition, ba by food must have calorie content information. 
(2) MEASURES DIRECTLY AFFECTING EXPORTS  
(i) Registration and documentation 
46. The export procedure is considerably less stri ngent than that for imports.  Exporters, like 
importers, are required to complete the Malawi Customs Declaration Form 12.  The information contained in Form 12 is fed into the MRA's data base.  Customs verifies the data, conducts an 
inspection, if it deems it necessary (approximately 10 % of export shipments are physically inspected), 
and clears the goods for export.  Exporters must complete an exchange control (CD1) form
33, copies 
of which are sent to the Ministry of Industry and Trade, and the Reserve Bank of Malawi (RBM).  
Export surrender requirements of 40% of receipts are in place for traditional exports tobacco, tea, and 
sugar.  Exporters are allowed to maintain forei gn currency deposit accounts,  and full repatriation of 
profits is permissible. 
47. Exports destined for countries where they benefit from preferential treatment require a 
certificate of origin.  Depending on the destination, a certificate is issued by the Malawi Confederation of Chambers of Commerce and Industry (MCCCI), the Malawi Export Promotion Council (MEPC), or the Malawi Revenue Authority (MRA). There is a fee for the certificate. 
(ii) Export taxes, charges, and levies 
48. The Customs Tariff Schedule (Fourth Schedule) allows for export duties on tea, sugar, and 
raw, unprocessed, and unmanufactured tobacco.  At pr esent, none of these products is subject to any 
export taxes.  However, export taxes were levi ed on tobacco during the period under review. 
(iii) Export prohibitions, controls, and licensing 
49. Malawi prohibits the export of scrap metal a nd petroleum products.  Exportation of petroleum 
products is not allowed as they are a strategic produc t for Malawi.  Until recently, maize exports were 
also banned (Chapter IV(ii)(a)).  Malawi has also at times temporarily banned the export of rice, for 
food security reasons. 
                                                     
 
32 The current National SPS Committee comprises repres entatives from the ministries of Industry and 
Trade, Agriculture and Food Security, Health, and Justice.   In addition, local governments, the private sector, 
and farmers are represented. 
33 Exporters are required to complete CD 1 forms if the value if the good s being exported exceeds 
US$1,000. Malawi WT/TPR/S/231/Rev.1 
 Page 29 
 
 
50. Malawi maintains an export licensing regime.  Goods requiring an export licence are:  
implements of war, certa in metals and minerals34, petroleum products, wild animals, maize and maize 
products, unmanufactured tobacco, tea, scrap metal, co tton, soya beans, and rice.  According to the 
World Bank, the export licensing procedures for soybean s effectively serve as an export ban to protect 
Malawi's livestock feed industry.35  The authorities state that for ag ricultural products, export licences 
are required primarily to monitor the food situation in  the country, while for scrap metals, a licence is 
required to curb theft of public facilities, such as transformers and telephone cables. 
51. The procedure for obtaining an export permit is similar to that for an import licence.  
However, for agricultural products an  SPS certificate is also needed. 
(iv) Export assistance 
52. Under the Export Incentives Act , which was enacted in 1988 and entered into force in 1989, 
goods exported within two years of manufacture are e ligible for tariff and excise drawbacks on certain 
imported inputs used in the manufacturing process.   Depending on the product, drawbacks can be 
partial or on all the products used in the manufactur ing process.  Duty drawback is determined on the 
actual material used.  Registered manufacturers must apply to the MRA for drawbacks and submit 
documentary evidence showing the use of materi als and the export of the product.  The MRA 
determines the amount of duty drawback in consu ltation with the manufacturer.  According to the 
authorities, refunds take approximately 30 days.  Exporters seeking duty drawbacks are required to 
lodge their claims within six months of the date of export.  False claims are subject to penalties, 
including imprisonment. 
53. The Export Incentives Act also assists exporters of  non-traditional exports that are registered 
with the Malawi Export Promotion Council (MEPC).36  These exporters receive a 12% income tax 
allowance, duty drawback on imported raw mate rials including packaging materials for export 
production, technical assistance in  activities such as promoting a nd marketing of export products, 
duty-free import of capital equipment used in the manufacture of exports, and a transport allowance equal to 25% of international transport costs incurred.  
54. With a view to diversifying products and ma rkets;  quality improvements;  effective export 
marketing;  reducing production cost s;  and promoting investment in export-oriented enterprises; the 
MEPC also provides technical assistance to registered exporters. 
(v) Export-processing zones 
55. Export-processing zones (EPZs) are permitted under the Export Processing Act 1995. EPZ 
status is granted to individual enterprises and, as  such, these are "free points".  Applications for EPZ 
status are made to the Ministry of Industry and Trade, which administers the Act.  The Ministry 
makes its decision after reviewing the application ag ainst criteria such as:  job creation, technology 
transfer, use of local raw materials, export dive rsification, warehousing capability and evidence of 
export markets.
37  EPZ status is granted for an initial period of five years and can be renewed for two-
year periods. 
                                                      
34 Metals and minerals that require an export licence are:  beryllium, cobalt, tantalum, uranium, lithium, 
columbite, niobium (columbium) thorium, germanium, titanium, nickel and nickel alloys, including any 
materials containing such metals. 
35 World Bank (2009c). 
36 Coffee, tea, tobacco, and sugar are considered to be  traditional exports;  all other exports are treated 
as non-traditional. 
37 An inter-institutional committee makes a recommendation to the Minister of Industry and Trade who 
approves it. WT/TPR/S/231/Rev.1 Trade Policy Review 
Page 30 
 
 
56. A designated EPZ is permitted to use "goods of an y description, which would be directly used 
for the manufacture of other goods and/or any goods manufactured in Malawi, which are meant for export", without having to pay any customs duty, excise duty or VAT.  However, certain goods are not eligible for duty/tax exemptions, these are deta iled in Section 18 of the Export Processing Act.  
Additionally, EPZs receive corporate income tax ex emptions.  The authorities stress that EPZs are 
intended to encourage producti on of non-traditional products. 
(3) I
NTERNAL MEASURES  
(i) Incentives 
57. Malawi offers a number of incentives for inv estment in specific industries as well as for 
export industries.  Incentiv es include customs-duty and tax concessions and exemptions 
(section (1)(iii)(c)), VAT exemptions (section (1)(v)) , for export-oriented industries (section (2)(iv)), 
and for those operating under an EPZ status (section (2)(v)). 
58. Other incentives include 100% investment tax allowance on qualifying expenditure (detailed 
in the tariff schedule) on new buildings and machin ery;  tax allowance for manufacturing companies 
to deduct all operating costs incurred up to 25  months prior to the start of production38;  allowance to 
carry forward losses for up to seven years, and an ad ditional 15% allowance if the investment is in a 
designated part of the country. 
59. In the 2007 budget speech, the Government a nnounced specific incentives to encourage 
development of the tourism sector.  The measur es included duty-free import for two years of:  
building materials;  industrial catering equipment;  li nen, cutlery, and crockery with hotel insignia;  
and on equipment used in water sports.  In th e 2009 budget it was announced that furniture and 
furnishings, public address systems, video confer encing equipment, television screens, and LCD 
equipment for use in hotels with more than 50 room s could be imported duty-free.  In addition, buses 
with a seating capacity in excess of 45 pers ons could be imported duty-free until 2010. 
60. In the budget speech for 2008 Malawi announced a shift from a discretionary incentives 
system to an automatic incentives system.  As a re sult, as long as the applicant's accounts are in order, 
and all the eligibility conditions for the incentive have been met,  then the incentives are applied 
automatically. 
(ii) Internal taxes 
61. The domestic tax structure in Malawi is made up of numerous of taxes and levies.  Malawi 
levies a corporate income tax at a rate of 30% fo r domestic companies and 35% for foreign branches.  
However, a number of preferential rates and exemp tions exist;  for example export industries in EPZs 
are tax exempt as well as government-designated priority industries (for 10 years).39  Additionally, a 
10% withholding tax applies to dividends.  The ex emption threshold for personal income tax is 
MK 120,000;  income in excess of this is taxed at varying rates with income over MK 156,000 being 
taxed at 30%.  Non-residents pay a 15% withhol ding tax on their gross income in Malawi.  
Furthermore, there is a 2% payroll levy, proceed s from which go into a government fund to finance 
training costs.  Estate taxes range from 0 to 9% depending on the value of the estate.  The VAT, 
which is a consumption tax, applies to most  goods at a rate of 16.5% (Chapter III(1)(v)).40 
                                                      
38 These are classified as pre-business co sts and are therefore deductible in full. 
39 Priority industries can forgo th e 10-year tax exemption and receive a preferential rate of 15% for the 
duration of their operations. 
40 The VAT rate was reduced from 17.5% to 16.5% in 2008. Malawi WT/TPR/S/231/Rev.1 
 Page 31 
 
 
62. Goods subject to excise duties (Chapter III(1 )(v)) include alcoholic beverages, tobacco 
products, motor vehicles, electricity, electrical app liances, wheat flour, fruit juices, perfumes, textiles 
and clothing, and precious stones.  The authorities state that the excise duty on most of these products is to promote local production (local companies ar e involved in the manufacture of these products) as 
well as for revenue generation purposes. 
63. Other taxes in Malawi are stamp duties on instruments such as leases, mortgages, bonds, and 
insurance policies;  these vary depending on the nature of the instrument and the value of the 
transaction.  A fuel levy is charged at MK 7. 35 per litre on petrol, MK 6.18 per litre on diesel, and 
MK 2.99 per litre on paraffin, to fund road construction and maintenance. 
(iii) Competition policy 
64. The Competition and Fair Trading Act (CFTA), en acted in 1998, entered into force in 2000.  
However, application of the Act commenced in 2005, with the creation of the Competition 
Commission and the subsequent appointment of commissioners.
41  The Commission is served by an 
interim secretariat.42  The objectives of the Act are to en courage competition in the economy, by 
prohibiting anti-competitive trade practices;  regul ate and monitor monopolies and concentrations of 
economic power;  protect consumer welfare; ma ke the production and distribution of goods and 
services more efficient;  and ensure the best possible fair market conditions. 
65. The Commission is mandated to undertake investig ations to determine whether any enterprise 
is involved in anti-competitive behaviour;  c onduct investigations on proposed mergers and 
acquisitions and their expected impact;  to take  action deemed necessary to prevent or redress the 
impact of a merger or acquisition and the abuse of  a dominant position by an enterprise.  Under the 
Act, the Commission is to be independent in its procedures and decisions. 
66. Between 2005 and September 2009 the Commission reviewed and decided on ten merger or 
acquisition cases.43  A number of investigations are under wa y on anti-competitive and unfair trading 
cases, including in the mobile pho ne, construction, and air transport subsectors.  The Commission 
took action against the Portland Cement Company on its exclusive dealing arrangement and resale 
price maintenance, which was deemed to be an unfair trade practice.44 
                                                      
41 The Commission consists of ten members including two representing business interests, a lawyer, an 
economist, an accountant, two representin g consumer interests, and three ex officio members (the Secretary to 
the Treasury or his representa tive, the Secretary for Trade and Industry, and the Director-General of the Malawi 
Bureau of Standards). 
42 The Commission was to be set up with funds releas ed on account of sovereign debt cancellation, and 
the requisite amount was included in the 2005/06 Budget.  However, this has not happened:  the interim 
secretariat consists of one professional and is funded by the Ministry of Industry and Trade. 
43 Mobil Oil Company by Total Oil Company;  Baobab Pensions by AoN Malawi Limited;  SSI 
Holdings by G4S International Holdings Limited;  Clark Cotton Malawi by Cargill Incorporated;  acquisition of 
60% shareholding in Telekom Networks Malawi by MTL Mobile;  Malawi Dstilleries Limited (MDL) by 
Bottling and Brewing Group Limited(BBG L);  Dulux Limited by Ergon Investments International Limited;  
Sale of Tobacco Processing Factory by Alliance One to A fricaleaf Processors;  Africaleaf Malawi Limited by JT 
International Holding BV;  Oil & Protein Company Limited Cascade Holdings. 
44 The Commission found that the Portland Cement Company had restricted distribution of cement and 
been involved in price fixing.  It ru led that the company needed to ensure that the distribution of cement was not 
restricted and that the price was determined by ma rket forces.  The company was required to amend the 
Standard Agency Agreement (purchase agreement betw een Portland Cement and its distributors detailing 
pricing and conditions of sale).  The ruling was challeng ed, however, and the court dismissed the case.  The case 
is yet to be concluded, there is an unde rstanding to settle the matter outside court. WT/TPR/S/231/Rev.1 Trade Policy Review 
Page 32 
 
 
67. The COMESA Competition Commission (CCC), " operationalized" in November 2009, is to 
be based in Malawi.  The CCC will address anti- competitive practices across the COMESA region, 
while national issues will be dealt with by nationa l commissions.  The CCC's Trade and Integration 
advisor stated that the CCC would seek to elim inate abuse of dominance and over-pricing as well as 
price fixing and collusion.45  Additionally, consumers would bene fit from regional integration through 
elimination of false and misleading information about product quality.  The CCC's mandate also 
includes investigating mergers and acquisitions  across the region, which may reduce or limit 
competition.  The CCC will have nine commissi oners drawn from member countries and an annual 
operational budget of US$1.4 milli on to be provided by COMESA. 
(iv) Government procurement 
68. The Public Procurement Act was passed by Pa rliament in 2003 and entered into force in 
2004.  The Act:  decentralizes procurement responsib ility to procuring entities by establishing internal 
procurement committees (IPC) in all procuring entities46;  seeks to create a cadre of procurement 
professionals, who will make up the IPCs;  and sets out  procurement rules, procedures, and methods.  
The Office of the Director of Public Procurem ent (ODPP), established under the Act, became 
operational in 2004.  The ODPP is to regulate, mon itor, and oversee public procurement and is not 
intended to be operationally involved  in the public procurement process.  However, due to the lack of 
qualified procurement officers in the procuring entities, the ODPP conducts "prior review" of 
procurements in excess of stipulated thresholds.  Although it is not stipulated in the Public 
Procurement Act, the ODPP requires all procurin g entities that are procuring goods and services in 
excess of their stipulated thresholds, to submit their award decisions for a "no objection" review prior 
to issuing an official award notice (Table III.5).  The prior review process is intended to rectify any 
misinterpretations or malpractices at the proc uring entity level as well as to ensure compliance 
improvements.47 
69. Under the provisions of the Act, if the bidders  are not satisfied with the procuring entity's 
decision, they have recourse to a three-tier complain t review system.  In the first instance they must 
lodge a complaint with the procuring entity within ten days of the award decision, the second tier is 
the review committee of the ODPP, and the third is the High Court.  The ODPP is authorized to take 
punitive action against government officials and bidde rs found to be violating the provisions of the 
Act, for example, bid rigging or failure to disclo se interest in the proceeding.  Violations by 
government officials are punishable by a fine of MK 50,000 or imprisonment for two years, while a 
bidder found to be in violation of the provisions  of the Act would be debarred from supplying any 
public institution for a period of two years.  The ODPP has no enforcement powers.  However, it 
recommends particular administrative actions to be  taken by controlling officers, in line with the 
provisions of the Act.  As a result officers have be en disciplined and/or transferred.  The ODPP has 
also supported litigation against offenders by testifying against them in court. 
70. Public procurement in 2006/07 was around MK 72. 2 billion, which is approximately 90% of 
total government revenue (latest available figure) , up from MK 8.5 billion in 2004/05 (approximately 
                                                      
45 The Standard.  Viewed at:  http://www.eastandard. net/InsidePage.php?id=1144003027&cid 
=14&j=&m=&d= 24 November 2009. 
46 The Act applies to procurement by all commercial parastatals, local government bodies, and 
government departments and ministries.  However, Malawi government projects that are donor funded follow 
the donors' procurement guidelines. 
47 Office of the Director of Public Procurement (2007), Procurement Capacity Assessment,   Lilongwe 
November. Malawi WT/TPR/S/231/Rev.1 
 Page 33 
 
 
15% of total government revenue).48  Under the legal framework for public procurement, there is no 
discrimination against foreigners.  However, to  support local industry, national competitive bidding 
bands for goods and services were raised to MK 100 million and MK 50 million, respectively, for 
2009/10.  Depending on the threshold amount, differ ent procurement methods and approvals are 
required (Table III.5). 
Table III.5 
Government procurement methods, 2010 
Goods Works Routine services  Printi ng services Consultancy services 
MK 300,000  
Request for quotations 
(RFQ) from a government-approved 
list;  decision to be 
made by internal procurement 
committee (IPC) RFQ from the National 
Construction Industry Council (NCIC) 
approved list;  decision 
to be made by IPC RFQ from a 
government-approved list;  decision to be 
made by IPC RFQ from a 
government-approved list;  decision to be 
made by IPC Selection from shortlist 
prepared by the ODPP 
MK 300,000-500,000  
RFQ from a 
government-approved 
list;  decision to be 
made by IPC RFQ from NCIC- 
approved list;  decision 
to be made by IPC RFQ from a 
government-approved 
list;  decision to be 
made by IPC RFQ from a 
government-approved 
list;  decision to be 
made by IPC Selection from shortlist 
prepared by the ODPP 
MK 500,000-2 million  
RFQ from a 
government-approved 
list;  decision to be made by IPC RFQ from NCIC- 
approved list;  decision 
to be made by IPC RFQ from a 
government-approved 
list;  decision to be made by IPC RFQ from a 
government-approved 
list;  decision to be made by IPC Selection from shortlist 
prepared by the ODPP 
MK 2 - 3 million  
RFQ from a 
government-approved list;  decision to be 
made by IPC RFQ from NCIC- 
approved list,  decision to be made by IPC RFQ from a 
government-approved list;  decision to be 
made by IPC RFQ from a 
government-approved list;  decision to be 
made by IPC Selection from shortlist 
prepared by the ODPP 
MK 3 - 5 million  
National competitive 
biddinga RFQ from the (NCIC)- 
approved list;  decision to be made by IPC National competitive 
biddinga National competitive biddinga Request for proposals (RFP) from local consultantsa 
MK 5 - 50 million  
National competitive 
biddinga National competitive biddinga National competitive biddinga National competitive 
biddinga RFP from local consultantsa 
MK 50 – 100 million  
National competitive 
biddinga National competitive biddinga International competitive biddinga International competitive biddinga RFP from local and international consultantsa 
MK 100 million – 1 billion  
International 
competitive biddinga National competitive bidding
a International competitive bidding
a International competitive bidding
a RFP from local and international consultants
a 
MK 1 billion  
International 
competitive biddinga International competitive bidding
a International competitive bidding
a International competitive bidding
a RFP from local and international consultants
a 
a These contracts are awarded in consultation with th e Office of the Director of Public Procurement. 
Source:  Information provided by the authorities;  and ODPP online information.  Viewed at:  www.odpp.gov.mw. 
                                                      
48 The authorities state that the significant difference be tween the two years had to do with data issues.  
They felt that the 2004/05 number was understated as many PEs did not provide the required information, while 
the MK 72.2 billion figure in 2006/07 was in all likelihood an overstatement.   In their estimate the figure should 
be closer to 70% of the total recurrent expenditure.  The ODPP is working towards resolving this problem. WT/TPR/S/231/Rev.1 Trade Policy Review 
Page 34 
 
 
(v) Local-content requirements 
71. Many of the end-use industrial tariff rebates on imported inputs that are set out in the customs 
schedule are conditional on certain components be ing manufactured domestically or certain 
production taking place in Malawi.  These requirements are applicable to televisions, radio and sound 
recorders, refrigerators and other cooling equipment,  and motor vehicles.  Use of local raw materials 
and labour are among the factors considered when gr anting to establish an EPZ.  Cigarettes containing 
more than 70% tobacco of Malawi origin are subject to half the excise duty of other cigarettes (Chapter IV(1)(ii)(b)). 
(vi) State-owned enterprises and privatization 
72. The Government embarked on a privatization programme in 1996 with the enactment of the 
Public Enterprise (Privatization) Act and the creati on of the Privatization Commission.  Subsequently, 
the Government announced a Divesture Sequence Plan (DSP) with 100 public enterprises to be 
privatized.
49  By 2006, 65 entities had been privatized  or divested, mainly through initial public 
offerings or trade sales through competitive tenders.  The Government did not keep golden shares in 
any privatized entity.  Privatization proceeds were used mainly to clear the debt of the privatized 
entity.  The privatization process seems to have been front-loaded, as 40 transactions took place prior 
to 2001.  The Government suspended the privati zation plan between July and October 2001, and a 
revised DSP was submitted to the cabinet for approva l in 2006.  The Government has now reverted to 
the original DSP, with an emphasis on public/priva te partnerships so as to stimulate infrastructure 
development, which is a key component of the Government's development policy.  At present, 
approximately 60 parastatals are involved in commerc ial operations in Malawi. They are concentrated 
mainly in the public utilities sector (electricity an d water supply), air transport and related activities, 
and agricultural marketing and warehousing (Table III.6).50 
73. Although the Government has withdrawn fro m manufacturing and trading (imports and 
exports), state involvement continues to be preval ent in many sectors of the economy and appears to 
have crowded out the private sector, which the G overnment has identified as a potential engine of 
economic growth.51  In 2009/10 the Government financed parastatals to the tune of MK 11.5 billion 
(approximately US$75 million) and this is project ed to increase to MK 12.1 billion (approximately 
US$80 million) in 2010/11.  The Government also finances the capital development of parastatals, which are supposed to be commercial.  The financing of parastatals exerts considerable pressure on 
the national budget, and there is evidence that some parastatals are not efficient and are 
under-performing.
52  Thus, it has become imperative for govern ment to consider to "rationalize the 
parastatal sector53", and speed up the privatization process, so that the drain on the national budget is 
minimized and funds are freed-up for Malawi's development needs.54 
                                                      
49 There were more than a 100 entities in the DSP, as subsidiaries were not taken into account and 
holding companies counted as one enterprise. 
50 Privatization activity has been widespread, encompassing inter alia,  government farms; hotels, 
hostels, and lodges;  banks and financial institutions;  agricultural processing units;  cement plant;  
telecommunications company;  and warehousing facilities. 
51 Absence or limitation of private-sector involvem ent is particularly stark in certain areas of 
agricultural marketing. 
52 Examples of poorly run parastatals are, inter alia :  ESCOM, which uses outdated plant and 
equipment and has been running an operational deficit;  ADMARC, which is being restructured due to its poor 
financial performance;  and the Malawi Savings Bank, whose earnings are insufficient to cover savings. 
53 Office of the President and Cabinet (2008). 
54 Progress on privatization has been slow during the review period;  less than 10 transactions were 
completed between 2003 and 2008. Malawi WT/TPR/S/231/Rev.1 
 Page 35 
 
 
Table III.6 
Stated-owned enterprises, 2010 
State owned enterprise Type of service Market share 
ADMARC Agricultural marketing 88% 
Airport Development Limited Maintains a nd develops airport infrastructure 100% 
National Food Reserve Agency Manages the Stra tegic Grain Reserve (SGR) in Malawi 90% 
Malawi College of Accountancy Provides accountancy tr aining in consultation with the Malawi Board of 
Accountants (MAB) n.a. 
Malawi Posts Corporation Provide s postal facilities throughout the Re public of Malawi and between 
the Republic and other countries 67% 
ESCOM Provides electrical energy and re lated services to stakeholders 90% 
Blantyre Water Board Supplies potable water to the city of Blantyre and its surrounding peri-
urban areas for commercial, industria l, domestic, and firefighting needs 80% 
Central Region Water Board Supplie s quality and safe water to urba n and semi-urban areas of the 
central region except for Lilongwe City n.a. 
Lilongwe Water Board Supplies potable water to the City of Lilongwe and its surrounding urban 
areas n.a. 
Southern Region Water Board Supplie s quality and safe water to urba n and semi-urban areas of the 
Southern Region n.a. 
Northern Region Water Board Supplies potable water and disposes of water- borne sanitation in all 
towns of the Northern Region of Malawi n.a. 
Air Malawi Provides passenger and cargo ai r transport services in Malawi 100% 
Malawi Housing Corporation Mana ges, develops and constructs houses and housing estates 100% 
Malawi Rural Finance Company Limited Provides financial services to commercial and agricultural sectors 35% 
Malawi Savings Bank Provides banking services 27% 
 
n.a. Not applicable.  
Source:  Information provided by the authorities of Malawi. 
(vii) Price controls and monitoring 
74. The Government controls the price of certain agricultural products.  Maize producers benefit 
from price support through guaranteed farm-gate prices,  while the selling price is also controlled by 
the Government.  Raw tobacco and cotton prices are also subject to minimum prices 
(Chapter IV(1)(ii)). 
75. Electricity tariffs are controlled through an "aut omatic tariff adjustment" mechanism, which is 
triggered if there is a 5% fluctuation in exchange ra tes or inflation (Chapter IV(2)(i)).  Fuel prices are 
also under government control, and any changes need to be recommended by the Liquid Fuels and 
Gas Pricing Advisory Committee, which represents the Government and stak eholders, and approved 
by the Malawi Energy Regulatory Authority (MERA) .  An "automatic pricing mechanism (APM)" is 
in place.  The price of fuel at the pump is dete rmined by the in-bond land ed cost (IBLC) the ruling 
price and Actual IBLC (international market price) , the difference between the two reflects changes in 
oil market prices translating to the importation loss or gain incurred by fuel importers.  Under the APM, a ±5% change from the Deemed IBLC to the Actual IBLC calls for a price revision 
(Chapter IV(2)(ii)). 
76. According to Water Works Act of 1995 the five water boards that provide water in Malawi 
propose prices to the Minister of Water Development and Irrigation for approval.  The authorities state that water sector reforms under way, woul d allow MERA to regulate the water sector. WT/TPR/S/231/Rev.1 Trade Policy Review 
Page 36 
 
 
(viii) Intellectual property rights 
77. There has been no change to the intellectual property regime in Malawi during the period 
under review, apart from a new Plant Breeder’s Right s Bill introduced in 2006.  The Bill aims to 
protect new plant varieties so as to motivate further development of more efficient varieties.55 
However, it has not yet entered into force.  The ma jor intellectual property laws are the Patents Act of 
1958, the Trade Marks Act of 1958, the Registered Designs Act of 1985, the Trade Descriptions Act 
of 1987, and the Copyright Act of 1989.56  The authorities are aware of the need to review the current 
outdated laws, to take account of technological cha nge and align them with international treaties.  
This has prompted the drafting of a new IP policy, which is awaiting approval by  Cabinet.  The aim of 
the IP policy is to stimulate the generation, protec tion, and commercialization of intellectual property 
rights as an economic stimulant for wealth creation;  encourage institutions to adopt their own IP 
policies;  and integrate the IP system in govern ment development strategies.  According to the 
authorities, the new policy is in the Office of th e President and Cabinet for review and approval. 
78. Intellectual property issues are the responsibility of the Registrar General under the Ministry 
of Justice (patents, trade marks and designs);  th e Copyright Society of Malawi (COSOMA) under the 
Ministry of Culture (copyright);  and the Minist ry of Trade and Industry (trade-related aspects of 
IPR).  The new IP policy proposes to consolidate IPR matters through the creation of the Malawi Intellectual Property Office (MIPO).  MIPO is envi saged as a self-financing parastatal organization, 
with income generated from registration fees for pate nts, copyrights and trade marks.  There appears 
to be a need to align Malawi's IP fee system with international practice. For example, registration fees 
for trade marks are currently just MK 1,000 (less than US$7). 
79. The authorities were not clear on how paralle l imports would be treated under the new 
legislation, whether a regional or national framework would be used.  They noted that parallel imports 
currently take place under all regimes (regiona l, national or any other framework).  
80. Implementation of IP policy faces a number of challenges, including lack of human resources 
and finance;  inadequate infrastructure for managi ng and administering IPRs;  absence of IPR-related 
training and educational institutions and services;  and lack of awareness among major stakeholders.  
The sale of counterfeit goods is widespread. 
81. Enforcement institutions include the Ministry of Ju stice, the Ministry of Culture, the Ministry 
of Trade and Industry, Malawi Police, the Malawi  Revenue Authority, and the Malawi Bureau of 
Standards.  Under the new IP policy, these institu tions would be required to set standards on IP 
service delivery;  inspect and ensure the delivery of original and genuine material;  advise institutions 
and stakeholders on IP issues;  mediate and arbitr ate IP-related disputes;  and prevent smuggling of 
counterfeit products. 
                                                     
 
55 The bill follows the provisions of the SADC Plant Variety Protection Act and the International Union 
for the Protection of New Varietie s of Plants (UPOV Convention). 
56 For details see WTO document WT/TPR/S/96, 9 January 2002.