By Edwin Mauluka
The main opposition Malawi Congress Party (MCP) says the tax measures outlined in the 2025/2026 Mid-Year Budget will worsen Malawi’s already fragile economy and push struggling citizens deeper into hardship.
MCP spokesperson on finance in Parliament, Eisenhower Mkaka, delivered the party’s official response on Monday, criticizing the Mid-Year Budget Statement presented on Friday by Finance Minister Joseph Mwavamvekha. He said the minister’s proposals expose “a troubling fiscal path that is unsustainable, harmful, and detrimental to the welfare of ordinary Malawians.”
According to Mkaka, the measures fail to offer a recovery plan and instead threaten to further suffocate an economy already under strain. “The budget statement is a list of promises that we can’t afford,” he said, adding that the choices being made today will cost future generations.
He described the increase in Value Added Tax (VAT) from 16.5 to 17.5 percent as a direct blow to the cost of living, saying it will inevitably drive up prices and increase the burden on households. “While enforcement is necessary, we must avoid excessive pressure on taxpayers, especially when businesses and households are struggling to recover,” Mkaka said. “Revenue measures should prioritise economic expansion, job creation, and confidence building.”
He also condemned the 0.05 percent levy on digital transactions for bank and mobile money transfers, calling it “regressive and backward” because it will discourage electronic payments and push people to keep cash. Mkaka argued that taxing gambling and lottery winnings would drain income from jobless youth who now rely on betting as a survival strategy.
He warned that the combined effect of new taxes — from withholding tax on rental income to cement import surcharges and insurance levies — will raise costs for consumers and businesses, slow growth, fuel inflation, and weaken the kwacha. “Individuals will suffer, households will choke, businesses will not produce, and the economy will be brought to its knees,” he said.
Mkaka acknowledged the need to raise revenue but argued the government’s approach sends the wrong signal. “Instead of promoting fiscal stability and growth, it places additional strain on Malawians, slows private sector development, and risks deepening inequality. Revenue measures must be balanced with the capacity of citizens and businesses to absorb them.”
He urged government to focus on policies that incentivize production and investment. “Our development strategies must reflect the desire to achieve more economic productivity,” he said.
Mkaka also criticized the employment freeze and stalled promotions in the public service, saying they will further undermine already understaffed critical institutions. He faulted the minister for prioritizing consumption over development spending, arguing that large allocations to the Farm Input Subsidy Program (FISP), pensions, and free education raise serious questions about financing and the lack of reform. He also urged government to scrap boarding fees and expressed doubt that FISP can succeed under current foreign exchange shortages.
Turning to the MWK5 billion Constituency Development Fund (CDF), Mkaka dismissed it as “a post-dated cheque on an empty account meant to bribe MPs and voters,” challenging government to release the money immediately if it truly exists.
He said the administration must stop blaming the previous government and instead focus on fixing the economic crisis. “This budget solves nothing; it merely shifts the burden of government failure onto already suffering Malawians. What we need are new ideas that promote productivity, not measures that overburden people.”
Mkaka also warned that the planned civil service head count could be politicized and used to target workers based on party affiliation.
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