…Finance Minister Joseph Mwanamveka is currently leading Democratic Progressive Party (DPP) led-government to tax everything on Malawians without mercy despite numerous calls to trade carefully on unreasonable tax regimes, levies.

Despite heavy taxes on almost everything, Malawi is still grappling with forex shortages chocking production for manufacturing, agriculture.

When we expose Mwanamveka incompetence, his cadres are all over on social media attacking this publication and its staff members while they know their master is a failure in managing Malawi’s economy under Peter Mutharika’s leadership.

Read the article below on how Mwanamveka is milking Malawians with heavy taxes, levies….

….GOVT IS ‘HARVESTING’ ALL YOUR MONEY

Key Takeaways

• A K3.5 Trillion Haul From Your Phone
• Arrears, Levies, And A Suspicious Exemption
• Mwanamvekha’s Aggressive Push

…how taxes, levies, and fees on digital financial services are ‘sentencing poor Malawians, businesses to death’

BY DUMBANI MZALE

Government is milking Malawians trillions of Kwachas in domestic revenue using a litany of taxes, charges and fees on digital financial services, and is exploiting already-weary Malawians who are panting with an all-time escalated high cost of living in a bleeding economy.

A K3.5 Trillion Haul From Your Phone

From Pay as you earn (PAYE) to a 0.05 levy on electronic bank transfers, Treasury, through the tax collecting body, the Malawi Revenue Authority (MRA), is massively amassing unspecified trillions of Kwachas, but PIJ can estimate that from Digital Financial Services (DFSs) alone, government could be generating around K3.5 trillion within a single fiscal year, and this is roughly a third of the 2026/27 national budget pegged at K10.9 trillion.

While individual bank levy deductions and other bank fees or charges popping on your phone may seem small in isolation, the cumulative cost for multiple transactions is just too significant to ignore.

The multiplicity of deductions is what raises concern as it affecting individuals with lower income streams, especially those who receive their monthly dues through banks or those who rely on mobile money transactions for their daily livelihood, our findings show.

Picture this: Between 2024 and 2025, Malawi recorded 2.5 million digital financial services, representing a 31.5 percent increase with a corresponding value of K65.5 trillion, an increase of 73.3 percent, according to Reserve Bank of Malawi (RBM) 2025 National Payments Systems Report.

RBM breaks down digital financial services into two, namely, non-bank mobile payments such as mobile money as well as bank-based digital payments channels such as mobile banking services, internet banking services as well as Point of Sale (POS).

Applying a blanket 0.05 levy, this roughly means that government could be collecting around K3.5 trillion from digital financial transactions alone, within a single fiscal calendar, holding all other things constant (ceteris paribus, in economics jargon) and the figure could be even much higher or less depending on the number of transactions per financial year.

The money is three times higher than an allocation of K1.3 trillion towards Agriculture, Tourism, Mining and Manufacturing as embedded in the 2026/27 National Budget which represents 12.2 percent of the total K10.9 trillion budget.

Arrears, Levies, And A Suspicious Exemption

PIJ conservative analysis is on the back of Malawi government’s policy thrust to start collecting in arrears levies that were not collected for transfers done since December 30 2025 and February 9 2026 following the introduction of a 0.05 percent levy on electronic bank transfers in the 2025/26 Mid-Year Budget Review.

Surprisingly, the levy does not apply on transfer of government funds to or from the RBM and commercial banks, PIJ understands.

Meanwhile, Malawians are also reeling from a 0.05 percent mobile money transfer tax on transactions exceeding K100,000, a tax policy option which has already been loathed by many mobile money users who randomly spoke to PIJ, especially from major cities of Mzuzu, Lilongwe, Zomba and Blantyre.

While not every digital financial transaction may be subjected to a 0.05 levy, our analysis augurs well with government’s sudden optimism on revenue generation as oozed in the 2026/27 national budget.

Mwanamvekha’s Aggressive Push

Minister of Finance Joseph Mwanamvekha is keeping his fingers crossed to see a substantial reduction of fiscal deficit from 11.9 percent to 9.0 percent of Gross Domestic Product (GDP) and consequently slash government borrowing and debt.

Mwanamvekha is seemingly more aggressive on tax issues this time around, perhaps after noting that tax contribution to the national output, popularly known as Tax to Gross Domestic Product (GDP) ratio, for Malawi is lurching at around the region of 11 to 12 percent. That is way below the Southern Africa Development Community (SADC) average of 14 percent and the continent’s average of around 16 percent.

However, domestic revenue alone in the 2026/27 national budget is projected at a historic K6.454 trillion, which represent 20.5 percent of GDP, and at that mark, it represents an increase of 44.1 percent from the 2025/26 Mid-Year revised figure of K4.478 trillion. It simply means that government is confident of generating an extra K2 trillion in domestic revenue in this fiscal year alone, and a veteran consumer rights activist John Kapito calls it insane and outrageous.

‘This Levy Will Create Doom’

Kapito, speaking to PIJ, said the levy on banking services would only create “doom” in the long run, as market players would likely begin looking for alternatives outside banking platforms to avoid “increasing and growing taxes.”

Kapito lamented that the Malawi economy is currently not strong enough to absorb such levies and many other recently introduced auxiliary taxes and charges on mobile money “that are not only punitive but also slow the growth of the financial market.”

“It is uncharacteristic of our decision makers to think that they can raise resources for a long time bearing in mind that only few Malawians can pay such a tax. This levy and also recent increase in mobile money charges spell doom. Nowadays you simply see deducted figures on your phone and it is not even easy to calculate how much they are deducted from you as figures are coming so rapidly so much so that you cannot follow or trace your money,” he observed before describing such a situation “annoying and disappointing.”

But the expected increase in the domestic revenue is on account of revenue enhancement measures coupled with automation of non-tax revenues and revision of user fees and charges, according to Mwanamvekha himself.

MRA Smashes Targets, But At What Cost?

Government optimism was evident in the month of April 2026 as MRA publicly announced that it had smashed its revenue target during the month by collecting K532 billion, beating the projected K510 billion by K22 billion, owing to “growing tax enforcement and compliance momentum.”

But there are legitimate questions from various stakeholders such as Kapito as to why government is over-collecting revenue all of sudden and why so many new taxes, levies and fees are being introduced or raised, time and again within a space of ten months.

Malawi has, for example, seen an increase in Value Added Tax (Vat), which has been static at 16.5 percent for years, to 17.5 percent.

Besides, there is a litany of other taxes which government is generating more resources from such as corporate tax, Value Added, capital gain tax, excise duties, and import tariffs, apart from many other user fees and charges which form non-tax revenue component of domestic tax revenue.

But the bank levy in itself is facing ongoing opposition from the public, just like 0.05 percent tax mobile money transactions, according to random interviews which PIJ has solicited.

“It [bank levy] is so counter-productive and has prompted me to close two of my four accounts which I had with banks,” said one Malawian who identified himself as Clement Chongoni from Mulanje but works in a formal employment in Lilongwe.

Running Counter To Malawi’s Own Cashless Agenda

PIJ can also authoritatively state that the introduction of the levy runs counter to the National Payments System Vision and Strategy Framework for 2026 to 2030 (the 2030 Framework) which aims at promoting digital financial services adoption and usage by phasing out cheque-based transactions, reducing the cost of digital payments, and accelerating the transition to electronic money instruments.

The strategy is also in tandem with the Malawi Vision 2063 which prioritises innovation, economic resilience, and financial inclusion.

A banker who opted for anonymity because he is not authorized to speak on behalf of his institution has told PIJ that as it stands, most pensioners are now preferring to withdraw all their pension money once paid through the banks and are opting to keep their money in cash at home.

“We have seen massive withdraws of pension payments … in recent months, at least from our bank’s perspective,” he claimed.

The Punter’s Anguish: 15 Percent Off Every Win

Agony and anguish have not spared participants in the gaming and lotteries sector as they also cry foul with random punters which PIJ spoke to across the country complaining about a 15 percent withholding tax government introduced on withdraws.

Malawi government recently introduced a final withholding tax of 10 percent on the wagered amount for casinos; and 15 percent final withholding tax on withdrawals for lotteries and sports betting, but the tax has already received a lot of resentments.

“For example, recently I placed K5,500 as stake on a football match betting ticket which had 20 odds. My ticket won but instead of getting K120,000, I was credited only K103,611.04, with almost K17,300 going to Malawi government through this new withholding tax of 15 percent. This was enough for me to buy three packets of sugar. It is so unfair,” said Jonathan Jere, a subscriber to one of the betting companies plying their trade in Malawi.

From Mponela To Blantyre: Businesses Crumbling Under The Weight

Jere is not weeping alone. Many other Malawians whom we spoke to and are in the business of selling luxury goods have also seen their businesses sinking, not only because of taxing digital financial services but generally because of several punitive taxes recently introduced by government.

At Mponela in Dowa, a business man who identified himself as Temwa Chidothi used to import wristwatches, perfumes, necklaces, and earrings from Tanzania and South Africa.

But he narrated with sorrow on how his business empire he built for years has crumbled so fast within a space of seven months.

Luxuries such as wristwatches, perfumes, necklaces, earrings, bangles, bracelets, cufflings, and video game consoles now attract excise taxes from MRA as part of government’s efforts to enhance domestic revenue collection.

“I used to travel to Dar es Salaam more regularly say once in every three months but since December last year, I have struggled to raise enough revenue to enable me travel or recapitalize my business. Just imagine yourself, we used to spend around K50,000 as transport from here [Mponela] to Songwe Border just few months ago, but today the situation on the ground is completely different as the bus fare has risen drastically from K50,000 now to K180,000 between the same route. Besides, most of the merchandise which I import from Tanzania is now attracting a lot of duty and i am simply out of business automatically,” he lamented bitterly.

‘Banks And Government Are Benefiting — Not Ordinary Malawians’

A digital financial services operator at Nchesi in Lilongwe who identified himself as Nickson Gwedeza described the introduction of a levy and multiple other mobile money fees as a ‘big blow’ to both her business and to authorities’ efforts towards pushing many Malawians into a cashless or digital economy.

He narrated to PIJ using a practical example where he had transferred K400,000 from one commercial bank (name withheld) to another commercial bank (name withheld), narrating that such a transaction had attracted a tax of about K3,800 including a constant bank fee of K840.

“In contrast, I only got K800 as a commission for transferring such money as only 0.002 is applied as a commission. It is banks and government who are benefiting from all these levies and charges and not ordinary Malawians. Many people are now preferring to keep notes at home than keeping the money at bank or in digital form. Deductions are just frustrating,” he lamented.

He is among 704,888 registered mobile money agents in the country, at least as of December 2025 official RBM records, and such a mark represents a substantial leap from the inception of mobile money in 2012, when subscriber numbers stood at just 185,758.

The total number of registered mobile money services subscribers stood at 20.1 million, as of 30th June 2025 from 17.6 million during the previous quarter representing a 13.95 percent increase. Male subscribers constituted 55.31 percent of the entire subscriber base whereas females constituted 44.69 percent up from 41.85 percent in the first quarter, according to RBM statistics we have seen.

Merchant Payments: The Bigger Picture Being Undermined

PIJ understands that the introduction of many fees on mobile money transactions could also be doing the small economy even more harm than good as authorities is already struggling to convince more merchants adopt use of mobile money than using cash.

Our understanding is based on the fact that despite the progress made in the past years to scale up usage of mobile money services, the use cases are still limited, with airtime top-ups dominating at 44.5 percent of total transactions processed, followed by Cash in/out at 33.4 percent.

On the other hand, Person to person (P2P) and merchant payment transactions only account for about 9.1 percent and 7.2 percent of the volume of transactions. PIJ understands that the ultimate industry goal is to increase merchant payments which has more positive externalities or multiplier effect including reducing cash handling as well as transaction costs since most of the transactions would be done electronically with less cash out transactions and the associated fees.

Govt To Kill Mobile Money Services

A Lilongwe-based tax expert Maxwell Mbaki, who is managing partner for Comgen Consult Limited, is cautious, warning that the figure (mobile money users) could plunge “sooner or later” as more Malawians shy away from keeping their money in the phone, “running away from unexplained fees and charges.”

According to Mbaki, with taxes, fees and levies being imposed on mobile money now, a rapid adoption of mobile money and its transformative impact on financial inclusion is currently under severe threat.

“It is an act of balancing on the part of Treasury as the more taxes, levies and user fees introduced could increase more revenue in the short to medium term but the same could reduce domestic tax generation in the long run as many tax payers become more sophisticated in avoiding taxes. Besides, financial inclusion agenda is also at a high risk of collapsing with government increasing or introducing many taxes on mobile money, which seemed the safest way of saving money in this modern world,” said Mbaki.

We contacted Ministry of Finance spokesperson Williams Banda to react to the general outcry on matters related to several punitive taxes which have thrown many Malawians under the bus, but we could not draw Banda’s response despite sending him our questionnaire two weeks ago.

Digital Transactions Surge — Even As The Trap Tightens

According to RBM’s National Payments System report of second quarter (Q2) of 2025, usage of digital financial services increased during the period under review with both the volume and value of transactions rising by 2.66 percent and 27.51 percent to 599.45 million from 583.89 and to K15.81 trillion from K12.4 trillion, respectively, compared to the first quarter of 2025.

Resultantly, the average value per transaction increased to K26,366.77 from K21,228.80 in the first quarter of 2025.

Based on the report, the year-on-year comparison also indicates a higher trend, with both the volume and value of transactions surging by 33.26 percent and 79.08 percent, respectively.

“The huge increase in usage reflects results of continued industry efforts in promoting adoption and usage of digital financial services by the public, buoyed by reforms in both the enabling infrastructure and regulatory framework. Key drivers of this milestone remain internet banking, mobile banking, mobile money and point of sale services. It is thus expected that this trend will continue owing to continued efforts by industry stakeholders in implementing initiatives aimed at ensuring that no one is left behind on the financial inclusion agenda,” reads the report in part.

ABOUT THE AUTHOR
Dumbani Mzale is a multi-award winning business journalist, having won several MISA Malawi awards between 2008 and 2022. He is an economist by training. His reporting has previously earned him IMF Journalism Fellowship on multiple occasions, enabling him to cover the IMF-World Bank Annual and Spring Meetings in USA. He specialises in economics, business and finance indepth reporting and analyses.

Email: dumzale@gmail.com X: @dumbanimzale