How to Compute Car Import Fees, Duty, & Taxes in Malawi

A landlocked country in southeast Africa, Malawi is known wonderful national parks, lakes, and inviting culture. It is a natural paradise that can be enjoyed by anyone. As it starts to level with the booming tourism of Tanzania, South Africa, and Kenya, the economy continues to rise, making its market ripe for importing a cheap used Toyota HiAce van for sale or any other kind of vehicle.

For the Malawi people, it is important to have a reliable vehicle that won’t burn a hole in their pocket. This is also the reason why Japanese used cars are quickly becoming popular in this country. After all, Japanese automakers have been known to focus on technological innovations, product enhancements, and safety improvements. Importing cars from Japan is simply the more convenient and cost-effective option for them.

If you are from Malawi and you plan to import a used JDM car, you must know the rules and regulations. It is also essential to know how to compute the fees, duties, and taxes. This way, you will not encounter unpleasant surprises along the way. Here at Carused.jp, we have a plug-in that allows you to conveniently compute the fees for your imported car. However, we understand that there are still some people who are interested in learning how the charges are calculated. As such, we’ve put together this guideline to show you how to determine your car import taxes, fees, and duties manually.

Defining Terms:

  • FOB: This term stands for ‘Free on Board’ which is the actual cost of the vehicle. It is not inclusive of additional fees for shipping, inspection, and insurance, among others.
  • CIF: This is an abbreviation for ‘Cost, Insurance, and Freight’. It is the total amount of the FOB, inspection, shipping, insurance, and other fees.

How to Calculate Malawi Revenue Authority Car Taxes: A Step-by-Step Guide

Disclaimer:
Please note that the values illustrated in this blog post do not necessarily represent the actual cost of the vehicle on our listing. Please feel free to visit our site to know the prices of the cars you wish to import.

First Step: Choose the Vehicle Model and Make

Before you calculate the fees, the first thing you have to do is choose a car model and make. It is worth noting that most car exporters and auction houses in Japan feature the FOB. So, make sure you check if the price is still exclusive of shipping fees, insurance, and taxes.

Second Step: Get the Vehicle’s Necessary Details

In Malawi, various factors contribute to the total cost of the imported used car. For instance, the manufacture year and the engine size affect the tax rate levied on the vehicle. Moreover, since the duties are computed according to the total value of the vehicle, newer cars are typically associated with more expensive taxes. On the other hand, since older cars have s lower value, they generally have lower taxes.

Here are the details you have to collect:

  • Vehicle model and make
  • Year of manufacture
  • Model code
  • Engine capacity
  • Chassis number
  • Fuel type

So, let’s say you’re looking for a cheap used Toyota HiAce van for sale. You must click a listing for a 2008 Toyota HiAce KDH206V to see the specifications. Make sure you write down the details:

  • Car make: Toyota
  • Car model: HiAce
  • Engine size: 3,000 CC
  • Year of manufacture: 2008/8
  • Model code: ADF-KDH206V
  • Fuel type: Diesel
  • FOB: $4,000

Third Step: Get the Vehicle’s CIF

Once you’ve gathered the important information on your vehicle, select the country of destination and port delivery. In Malawi, you can choose to have the car shipped to Dar es Salaam Tanzania, Durban (South Africa), and Maputo (Mozambique). Let’s say the CIF of the vehicle you chose is worth $4,893.

Fourth Step: Convert the Amount to MWK

Since the CIF in most car exporting and auction sites is expressed in US dollars, you have to convert the amount to Malawian kwacha (MWK). This also means that the total amount you will pay is depended on the current USD-MWK exchange. Since you’re likely to make your payment through your local bank, we recommend visiting them and asking for the accurate exchange rate.
Now, let us go back to our example. Let’s say that 1 USD is equal to 727 MWK. This means that the CIF worth $4,893 will be 3,577,211 MWK.

Fifth Step: Calculate the Vehicle Import Tax

Vehicles imported to Malawi are classified into two major categories for duty purposes—goods and passenger vehicles. Cars that carry passengers are further divided into two sub-categories—station wagons and saloons that carry less than ten passengers; and minibuses and buses that carry more than ten passengers.

As we’ve mentioned, the engine size and the year of manufacture affects the rates of duty applicable to the vehicle. So, the older the car and the bigger the engine capacity, the higher the excise duty rates are. Here is an illustration:

Engine Capacity: 1000 CC to 1499 CC
Age: 0-8 years (Duty: 25%; Excise: 0%; VAT: 16.5%)
Age: 8-12 years (Duty: 25%; Excise: 30%; VAT: 16.5%)
Age: 12 years and older (Duty: 25%; Excise: 60%; VAT: 16.5%)
Engine Capacity: 1500 CC to 1999 CC
Age: 0-8 years (Duty: 25%; Excise: 15%; VAT: 16.5%)
Age: 8-12 years (Duty: 25%; Excise: 45%; VAT: 16.5%)
Age: 12 years and older (Duty: 25%; Excise: 75%; VAT: 16.5%)
Engine Capacity: 2000 CC to 2499 CC
Age: 0-8 years (Duty: 25%; Excise: 35%; VAT: 16.5%)
Age: 8-12 years (Duty: 25%; Excise: 60%; VAT: 16.5%)
Age: 12 years and older (Duty: 25%; Excise: 90%; VAT: 16.5%)
Engine Capacity: 2500 CC to 2999 CC
Age: 0-8 years (Duty: 25%; Excise: 45%; VAT: 16.5%)
Age: 8-12 years (Duty: 25%; Excise: 70%; VAT: 16.5%)
Age: 12 years and older (Duty: 25%; Excise: 100%; VAT: 16.5%)
Engine Capacity: 3000 CC
Age: 0-8 years (Duty: 25%; Excise: 55%; VAT: 16.5%)
Age: 8-12 years (Duty: 25%; Excise: 80%; VAT: 16.5%)
Age: 12 years and older (Duty: 25%; Excise: 110%; VAT: 16.5%)

Keep in mind that the duty payable is calculated according to the Customs Value of the vehicle. The Customs Value is the total amount of the CIF and the Port Charges. Now, let’s go back to our example. The Toyota HiAce van you wish to import has a 3000 CC engine capacity, and it is between 8 to 12 years old. Let’s say that the charges in the port you selected is worth 1,253,448.28 MWK. The computation is as follows:

  1. Import Duty: 25/100 x 4,830,659.28 = 1,207,664.82 MWK
  2. Import Excise: 80/100 x 4,830,659.28 + 1,207,664.82 = 4,830,659 MWK
  3. Import VAT: 16.5/100 x 6,038,324.10 + 4,830,659 = 1,793,382.21 MWK
  4. Total Duty Payable: 1,207,664.82 MWK + 4,830,659 MWK + 1,793,382.21 MWK = 7,831,706.03 MWK

Sixth Step: Calculate the Overall Expenditures

Now, we’ve derived that the total duty fee amounts to 5,799,553.33 MWK. We will now add that to the CIF and the port costs. The overall breakdown will be:

CIF + Car Import Tax + Port Cost = Total Amount of the Imported Vehicle After Taxes
3,577,211 MWK + 5,799,553.33 MWK + 7,831,706.03 MWK = 17,208,470.36 MWK

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