Estates duty threshold now at K5m

Parliament has approved the revision of the threshold at which estate duty is paid from K30 000 ($51.07) to K5 million ($8,512.09) in keeping with the devaluation of the currency.

This means that Malawians will now be paying the 10 percent estates duty on the value of property exceeding K5 million ($8,512.09).

Tabling the Estates Duty (Amendment) Bill in Parliament yesterday, Minister of Finance, Economic Planning and Development Goodall Gondwe informed the House that the procedure for assessment of estate duty was that the rates and threshold value were too low.

He said: “Currently, estates duty is levied on property whose value is in excess of K30 000. In light of the depreciation of the Malawi kwacha, the value of the estates duty has been eroded. People who ordinarily would have not paid estates duty are doing so and estates duty has become exorbitant.

However, the bill did not pass without controversy as most members of Parliament described estates duty as legalised property grabbing and appealed for its abolishment.

People’s Party (PP) spokesperson on legal affairs Ralph Mhone said the revised threshold did not take into account the tax contributions that a deceased person made to the government in his working life.

However, Minister of Justice and Constitutional Affairs Samuel Tembenu came to the rescue of Gondwe to explain that the government was not imposing tax, but complimenting the Deceased Estates, Wills and Inheritance Act.

The bill was eventually passed with a minor amendment on the schedules and a warning from Gondwe that abolishing the duty would mean the government would have to find other sources of revenue in place of the duty. n