In the 2019/20 National Budget, the government introduced a carbon tax with a directive that motorists will be paying when renewing the certificate of fitness (CoF). One year later, during the 2020/21 proposed National Budget presentations, the Minister of Finance, Economic Planning and Development Joseph Mwanamvekha revealed a new payment method which states that motorists will be paying carbon tax at K5 per litre when refueling at a filling station.
Mwanamvekha assured parliament that the ministry had consulted the Malawi Energy Regulatory Authority (Mera) and has been assured that this measure will not lead to an increase in fuel prices and the government will be closely monitoring the situation. “Foreign registered motor vehicles under temporary import permit or transit will still be required to pay carbon tax at the point of entry based on engine capacity.” he said to the parliament.
The introduction of carbon tax met widespread resistance, to the extent of protests, while stakeholders questioned why the tax was not applied on government vehicles. The Parliamentary Committee on Natural Resources and Climate Change has questioned the exemption, arguing that revenue is being lost in the process. Committee chairperson Werani Chilenga called for a review in the exception, considering that there would be more revenue collected if everyone was included, government vehicles, as well as factories and other users.