Bank levy deductions attract public outcry

Pub­lic out­cry over the 0.05 per­cent levy on bank trans­fers per­sists, with cus­tom­ers lament­ing the daily deduc­tions on their accounts as com­mer­cial banks move to col­lect the tax in arrears. The 0.05 per­cent levy on bank trans­ac­tions came into effect Decem­ber 31, 2025, and over the past weeks, banks have been deduct­ing the levy in arrears.

However, the move has triggered wide­spread com­plaints from cus­tom­ers who report mul­tiple daily deduc­tions. This comes as the coun­try is advoc­at­ing enhanced digital bank­ing ser­vices uptake, which saw the value of digital pay­ments grow­ing to K187 tril­lion in 2024. This means the gov­ern­ment could col­lect K935 mil­lion using the levy.

Mean­while, one cus­tomer told Busi­ness Times that the deduc­tions promp­ted them to change options of trans­act­ing. “At first, I noticed that the bank was deduct­ing me mul­tiple times in a day and this is an account where I had kept about K10 mil­lion. So, I went to the bank and depos­ited it into another bank account at a dif­fer­ent bank.

“I have just now learned that it is the 0.05 per­cent bank levy. But still, I feel it is too much,” said the cus­tomer.

Con­sumers Asso­ci­ation of Malawi (Cama) Exec­ut­ive Dir­ector John Kapito has warned that the levy could reverse gains made in pro­mot­ing fin­an­cial inclu­sion. In an inter­view on Fri­day, Kapito said the meas­ure is cre­at­ing ‘double tax­a­tion’ on inflows and out­flows, say­ing that the cumu­lat­ive deduc­tions are dif­fi­cult for con­sumers to track and risk dis­cour­aging the use of formal bank­ing ser­vices.

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“Malawi has been grap­pling with issues of fin­an­cial inclu­sion, try­ing to increase the num­ber of banked people. But I think we will see later that the num­ber of banked indi­vidu­als is going to reduce,” he said. Eco­nom­ist Mar­vin Banda said the prob­lem is not neces­sar­ily the levy itself, but how it was intro­duced and com­mu­nic­ated. He said ret­ro­spect­ive deduc­tion has cre­ated a per­cep­tion of unfair­ness, exposed poor policy com­mu­nic­a­tion and ulti­mately has had an erosive impact on trust in both the bank­ing sys­tem and pub­lic insti­tu­tions.

“As oth­ers become more will­ing to bear the cost of trans­ac­tions oth­ers will revert to cash trans­ac­tions, reduce usage of bank­ing and other fin­an­cial instru­ments which will ulti­mately affect fin­an­cial and digital inclu­sion,” Banda said Bankers Asso­ci­ation of Malawi (Bam) Chief Exec­ut­ive Officer Lyness Nkun­gula said the fre­quency of deduc­tions being exper­i­enced is mainly due to arrears recov­ery, the fre­quency of deduc­tions and going for­ward, deduc­tions will be applied in real time.

“Banks are required under the Con­sumer Pro­tec­tion Act and Para­graph 31 of the Fin­an­cial Ser­vices Dir­ect­ive, 2024 to provide real-time dis­clos­ure of fees and charges for digital trans­ac­tions. The levy was gaz­etted on Decem­ber 30, 2025, and banks are obliged to com­ply with the law,” Madinga said. Con­firm­ing on the arrears, Malawi Rev­enue Author­ity (MRA) Head of Cor­por­ate Affairs Wilma Chalulu said the levy is being imple­men­ted in line with the law.