MALAWI: Close to €600,000 in carbon tax collected in just two months

The carbon tax is making a remarkable entry in Malawi. The Malawi Revenue Authority (MRA) announced on January 28, 2020 that it had collected 452 million kwachas, about 600,000 euros in carbon tax from motorists, in the space of two months.

Reacting to this announcement, the Ministry of Natural Resources, Energy and Mines immediately referred the matter to the Carbon Tax Management Committee to remind them of the destination of the funds thus generated. According to the texts instituting the carbon tax in Malawi, the revenues collected must be transferred to the Environment Fund. A structure managed by the Ministry of Natural Resources, Energy and Mines in collaboration with the Malawian Environmental Protection Agency (MEPA). The agency will use the revenues from the carbon tax to finance projects to combat environmental degradation and fight for environmental protection.

Introduced in Malawi’s 2019/2020 budget, this carbon tax is levied annually and varies from 4,000 kwachas to 15,500 kwachas ($4.96 – 19.22 euros), depending on the size of the car’s engine.

Malawi produces nearly 2 million tonnes of CO₂ per year

Malawi is the second country on the continent, after South Africa, to have adopted the carbon tax. The idea of “putting a price on carbon” to limit emissions of climate-causing gases was first mooted at the time of the Kyoto Protocol in 1997. The “carbon tax” applies to fossil fuels, such as gas, oil and their derivatives, which emit a lot of CO₂.

It is also the tax component adopted by the Government of Malawi as part of its greenhouse gas reduction targets that the country has set itself by signing the Paris agreement in 2015.

Malawi’s per capita CO₂ emissions are equivalent to 0.11 tonnes per person per year. On the basis of a population of about 19 million, the CO₂ emissions of this East African country can thus be estimated at 2 million tons of carbon per year.

Boris Ngounou