Rédaction Africa Links 24 with Taonga Sabola
Published on 2024-03-28 06:47:50
The Parliament of Malawi passed the Appropriation Bill of 2024, giving authorization to Minister of Finance Simplex Chithyola Banda to utilize K5.998 trillion in the 2024-25 fiscal year for procurement of goods and services until March 31, 2025. This decision came after the approval of the 2024-25 national budget a day earlier.
Additionally, the House passed three taxation bills aimed at enhancing tax administration in the country. One of the bills, the Value Added Tax (Amendment) Bill, removes mandatory registration for importers of services and introduces an electronic tax invoicing system. This bill also includes the imposition of value added tax on the supply of electric motor vehicles.
Furthermore, the Customs and Excise (Amendment) Bill was passed to allow for the use of electronic certificates of origin, aiming to streamline processes and improve efficiency. However, concerns were raised by the opposition Democratic Progressive Party (DPP) spokesperson Shadric Namalomba about the need for reliable internet connectivity and capacity within the Malawi Revenue Authority (MRA) to detect fake certificates of origin.
United Democratic Front spokesperson Ned Poya echoed similar sentiments, emphasizing the importance of robust internet connectivity and vigilance by MRA officers to prevent the circulation of forged certificates.
Another bill, the Taxation (Amendment) Bill, was also passed to amend the Taxation Act, extending the 40 percent tax rate on taxable income above K10 billion to all companies. The bill also introduces new rates for presumptive tax, modifications to Pay As You Earn rates, and adjustments to allowable deductions for certain expenditures.
In response to the bills, DPP spokesperson Ralph Jooma expressed concerns about certain provisions, suggesting that taxation should exclude days when vehicles are out of service. He proposed a mechanism where vehicle owners can retrieve their insurance disks when their vehicles are not in use to avoid taxation for idle periods.
Jooma also commented on the increase in the tax-free bracket, arguing that it may not benefit many low-income earners in Malawi. He suggested alternative measures such as raising the minimum wage or adjusting the tax brackets to redistribute resources more equitably.
Minister Chithyola Banda defended the government’s decisions, stating that the minimum wage had already been increased to address concerns about the welfare of low-income workers.
In conclusion, the passage of these bills reflects the government’s efforts to strengthen tax administration and financial management in Malawi. While concerns have been raised about certain provisions, the overall objective is to ensure prudent financial management and enhance the effectiveness of tax collection in the country.
Read the original article on The Times
