The rate
The standard rate in Malawi is 17.5%. Some goods and services carry reduced or zero rates and others are exempt. The difference matters: zero-rated sales still let you reclaim the tax on your purchases, exempt sales do not.
Raised from 16.5% by the Value Added Tax (Amendment) (No. 2) Act, No. 37 of 2025, with effect from 30 December 2025 — not 1 January 2026, which is the date most summaries give.
Who must register
K25 million of taxable turnover a year. Reach or exceed it and you must apply to the Commissioner General within 30 days of becoming a taxable person. Below it you can still apply for voluntary registration, and MRA expects you to say why not registering would hurt the business; the Commissioner General can refuse. Separate businesses under one owner may be added together to test the threshold. A business making only exempt supplies cannot register at all. Two things sit outside the threshold: non-resident digital service providers and online platforms must register regardless of turnover, from 14 April 2026; and micro, small and medium businesses turning over K12.5 million or less can instead pay Presumptive Tax, which replaced Turnover Tax in 2021.
How to register
VAT registration is done through Msonkho Online or at a Domestic Taxes office. The Commissioner General issues a certificate of registration, which must be displayed at the principal place of business, and the effective date of registration is the date written on it (VAT Act, section 10).
A business that should have registered is treated as a taxable person from the start of the tax period after the one in which the duty to register arose (section 11(5)), so VAT is due from that date. A business registering voluntarily is registered unless the Commissioner General is satisfied it has no fixed place of abode or business, will not keep proper accounting records, will not submit regular and reliable returns, or is not a fit and proper person (section 11(12)).
After registration, a VAT-registered business also registers on the Electronic Invoicing System at eis-portal.mra.mw before it can issue tax invoices.
Filing and paying
Registered and filed with Malawi Revenue Authority (MRA).
Monthly. The return is VAT Form 3 and it is due, with payment, by the 25th day of the month following the tax period. File it in Msonkho Online: Taxpayer Login, Submit a Return, pick Domestic VAT from the Returns Summary, choose the period, key the Output VAT fields, then download, complete and upload the templates for local purchases, withholding VAT and importation, check the VAT Return Summary, Certify and Submit. Print before you submit if you want a copy. The system validates the TINs you list, so contact MRA if one fails. Returns can also be handed in at any Domestic Taxes office or at the Customs and Excise stations at Chitipa, Nsanje, Mwanza, Liwonde, Chiponde and Muloza. Period codes run on the April-to-March tax year, so 2027/01 is April 2026, not January. Filing in the EIS is not filing a return: VAT liabilities do not flow from the EIS into Msonkho Online, and you still file separately.
Penalties for getting it wrong
Penalties are in currency points under the Tax Administration Act, and a currency point is K1,000. Filing a return late costs 500 currency points for an entity and 100 for an individual for the first month — K500,000 and K100,000 — plus 50 and 10 currency points for each further month or part month it stays unfiled. Failing to register carries the same scale. Paying late costs 20% of the unpaid tax plus interest at the prevailing bank lending rate plus 5% a year, charged for each month or part month the tax is outstanding. Failing to issue a tax invoice at all is dearer than any of these: under section 46 of the VAT Act it is ten times the VAT invoiced in the transaction, or K500,000, whichever is greater. MRA's older published tables still show K300,000 for companies and K75,000 for individuals for a late return; the Tax Administration Act figures above are the later law.