New income tax measures delay
Two months after Minister of Finance and Economic Affairs Simplex Chithyola Banda announced new income tax measures, the new taxes are yet to be gazetted, meaning they will be implemented at a later date.
The delay means employees will not immediately enjoy the increase in the zero-rated tax bracket from K100 000 to K150 000 and other benefits that come with the introduction of new income tax changes this month.
In an interview on Wednesday, Malawi Revenue Authority (MRA) spokesperson Steven Kapoloma confirmed the development and said the public tax collector is still using old income tax rates as the new taxes can only be implemented after being gazetted.
However, he stressed that the new income tax rates are still effective April 1 2024 when gazetted and those who are supposed to pay less tax after the new income tax rates will be refunded.
Said Kapoloma: “The refunds will not be physically made by MRA, but will be subtracted from the payments to be made in the month after gazetting. Accountants will create a tax account for each employee which will show any overpayment made.
“When paying new taxes after the gazette, the tax to be paid will have to factor in the overpayment that was made, which means when paying the new tax, they will pay less the amount to be paid.”
He said this is not the first time to experience delay in getting off the taxes, saying at some point it took three months.
Efforts to establish the cause of the delay proved futile as Chithyola Banda, the ministry’s Principal Secretary Betchani Tchereni and spokesperson Williams Banda could all not be reached by phone. They also did not attend to a questionnaire sent to them via WhatsApp.
But Malawi Congress of Trade Union president Charles Kumchenga expressed worry over the delay to gazette the new income tax measures, saying it will affect employees who had expectations that they would start benefiting from the increase in the tax free bracket.
He called on the government to expedite the process so that employees should start benefiting.
In the 2024/25 National Budget on February 23 2024, the minister announced that value-dded tax, income tax and administrative measures will take effect on April 1 2024 upon the passage of relevant Bills by Parliament and the President assenting the laws.
