BLANTYRE-(MaraviPost)-Many governments including Malawi are seeking to drastically reduce illicit trade practices such as under-declaration, tax evasion, smuggling, counterfeiting, and the distribution of unauthorized goods to safeguard tax revenues and protect consumers.
An enhanced tax stamp management system combines physical security features with an integrated digital traceability platform.
This platform enables governments to monitor the production, import, export, and distribution of products subject to excise duty (e.g., tobacco, spirits, various alcohols, and sometimes soft drinks or sensitive products such as agricultural fertilizers) on a national scale.
In a bid to introduce digital tax stamps, Malawi Revenue Authority (MRA) launched a Request for Proposals (RFP) in March 2022, following International Bidding Procedures to procure a solution aimed at enhancing its tax collections.
Ahead of the RFP, SICPA demonstrated its solution in Malawi in August 2021, with site visits organized to Tanzania and Uganda for a team from Domestic Taxes Division under MRA, showcasing its successful implementation in the region.
SICPA officially submitted its bid on March 29, 2022. To ensure a thorough evaluation, Government-to-Government (G2G) due diligence visits were conducted in May 2022 to Kenya and Morocco, where similar systems were assessed.
More than 180 states worldwide have placed their trust in SICPA’s platform for sovereignty.
Created in 1927, SICPA has 13 production sites and over 3.000 employees on 5 continents, including Africa. In Malawi, local staff work from offices in Lilongwe, Blantyre, and Mzizi.
Today, more than 15 industries rely on SICPA’s products and brand protection solutions, including pharmaceuticals, cosmetics, agrochemicals, seeds, luxury goods, and consumer and industrial products, with billions of products marked per year worldwide.
The journey between MRA and SICPA concluded successfully in September 2023, with the formal signing of the current contract.
During the 2024-25 Mid-Year Budget Review, Finance Minister Simplex Chithyola described Digital Tax Stamps as a “critical measure”.
This system strengthens Malawi’s revenue collection framework by ensuring products in the market are legitimate, tax-compliant, and businesses contribute their fair share to government revenue,” said Chithyola.
The Minister added, “It directly tackles challenges of tax evasion and discourages smuggling by enabling the identification of non-compliant goods.”
Kondwani Sauti-Phiri, MRA’s Deputy Commissioner for Domestic Taxes, revealed that manufacturers and importers have embraced the system.
This is evidenced by the ever-growing number of stamps ordered by manufacturers and importers, as well as new registrations for the system by these stakeholders.
“We’ve engaged extensively with stakeholders, including manufacturers, wholesalers, and cross-border traders, to ensure smooth adoption of the excise tax stamp system,” said Sauti-Phiri.
He emphasized that the system not only enhances tax compliance but also protects local industries from unfair competition caused by smuggling, counterfeit goods, and illicit trade.
Sauti-Phiri further explained that the system is designed to protect the public from consuming hazardous products.
While tax stamps have been applied to cigarettes for over a decade, their scope now includes a broader range of excisable products such as alcoholic beverages, including beer, wines, spirits, whiskies, and opaque beer; non-alcoholic beverages, such as bottled water, carbonated soft drinks, energy drinks, fermented tea, and Mahewu; as well as personal care products like lotion and glycerine.
The implementation of Digital Tax Stamps in Malawi signifies a transformative advancement in tax administration.
By enhancing tax compliance, safeguarding government revenue, and protecting consumers from illicit goods, this initiative demonstrates MRA’s commitment to a robust and transparent tax system.
