The Minister of Finance in
his 2010/2011 Budget Statement announced new tax measures affecting the
Taxation Act and the Value Added Tax Act. These measures are effective from
1st July, 2010.
MRA is, therefore, pleased
to explain new domestic tax measures as follows:
INCOME
TAX
1.
Section 2 of the Taxation Act has been amended on person resident
in Malawi to include any individual present in Malawi for an
aggregate of 183 days or more in any twelve months period
commencing or ending in the year of assessment concerned.
2.
Section 16 of the Taxation Act
has been amended to remove any tax free contract gratuity.
3.
Section 84A of the Taxation Act
has been amended to change the due date of provisional tax from the 30th
day after the end of the quarter to the 25th day.
4.
Section 102A of the Taxation Act
has been amended to remove withholding tax exemption on payment for any
supplies including foodstuff, tobacco and other products.
5.
The First Schedule of the
Taxation Act has been amended to remove exemption from income tax on
pension.
6.
The Eleventh Schedule has been
amended to introduce a 15 percent tax on earnings from investment of pension
funds.
7.
The 14th Schedule has
been amended to remove the K60, 000 withholding tax free threshold on
payment for supplies including foodstuff, tobacco and other products and
reduce the withholding tax rates to 3 percent on payment for any supplies
including foodstuff, tobacco and other products.
VALUE
ADDED TAX (VAT)
1. Section
34 of the VAT Act has been amended to introduce a 30 percent
penalty on
the value of any refer to drawer cheque.
2. Sections
45, 46 and 50 of the VAT Act have been amended to replace
fines with administrative
penalties. The amounts have not changed.
For more information, you
may call S. Kapoloma on 0888986200 and E. Mselemu on 0888950757 or 01822588
during working hours.
LA Muhara
COMMISSIONER GENERAL
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