The Malawi Revenue Authority (MRA) has intercepted MK85 million worth of smuggled goods in Lilongwe, marking a major breakthrough in enforcing the Kalondola Digital Tax Stamp system.
Acting on a tip from a patriotic citizen, MRA and police raided a warehouse in Area 4, Lilongwe, where illicit goods - including body care products, diapers, and other taxable items - were being offloaded without proper customs clearance.
Crackdown on Tax Evasion
To strengthen compliance, MRA has ramped up spot checks at retail shops, wholesalers, and liquor stores, following a directive from Finance Minister Simplex Chithyola Banda in his mid-year budget review.
While adherence to the tax stamp system is improving, some importers and manufacturers continue to evade regulations by failing to affix the required stamps on excisable products.
Smuggling Hurts National Development
Grace Chilima, Deputy Manager of MRA's FAST Centre, stressed the impact of tax evasion and said, "Had these goods reached the market undetected, Malawi would have lost revenue crucial for roads, schools, hospitals, and civil servant salaries."
She urged the public to remain vigilant and report illegal trade, warning that smuggling directly undermines national progress.
MRA has vowed to eliminate tax evasion. Kalondola Project Manager Steven Kuntembwe emphasized that spot checks will continue to enforce tax stamp laws and penalize offenders.
"Failure to affix or activate tax stamps, as well as trading in unstamped excisable products, will result in penalties," Kuntembwe warned.
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He urged businesses to comply, noting that enforcement is about ensuring fairness in the marketplace.
Digital Tax Stamps: A Revenue Game Changer
The Kalondola tax stamp system, introduced after amendments to the Customs & Excise Act, now covers a range of excisable products beyond cigarettes, including alcoholic beverages, soft drinks, bottled water, and personal care items.
The system, implemented by SICPA Malawi after a competitive procurement process in 2023, is globally recognized for improving tax compliance, consumer protection, and industry fairness.
By leveraging cutting-edge fiscal technology, SICPA Malawi is helping the country to foster a transparent business environment that attracts investment and funds social services like healthcare, education, and infrastructure.
In 2019, Tanzania rolled out the Electronic Tax Stamp Management System (ETSMS), a key and most robust system supporting the discovery of smuggled or illicitly traded products in the market, heralding an end to the previous tax administration solution.
ETMS is cited by the International Monetary Fund as a measure increasing tax collection in Tanzania.
High-Tech Enforcement
MRA officers have been trained to monitor compliance using advanced tools like the Horizon EVO Web Application and the Kalondola365 mobile app provided by SICPA Malawi.
As tax enforcement tightens, MRA urges businesses to embrace compliance - not just to avoid penalties but to support Malawi's long-term economic growth under the Malawi 2063 Agenda.
