Home
Business
Presumptive Tax

Presumptive Tax

Last Updated: 15 March, 2022 - Print

Presumptive tax is an advance payment of Income Tax for small business whose annual turnover is less K12.5 million. Presumptive Tax has replaced Turnover Tax (TOT). Presumptive Tax intends to improve compliance of the informal sector by making it easy for them to know how much income taxes they are supposed to pay in a year without the requirement of keeping any books of accounts. Taxpayers under the Presumptive Tax will be required to pay their income tax either once a year or quarterly.

Presumptive Tax exemptions

Presumptive tax on turnover tax shall not apply to the following:

  •   Rental income
  •    Management or professional fees or training fees
  •   Income of incorporated companies
  •   Any income which is subject to a final Withholding Tax under the Taxation Act

Presumptive Tax rates

Annual turnover

Rate

Income not exceeding K4,000,000

K0

Income above K4,000,000 but not exceeding K7,000,000

K110,000.00

Income above K7,000,000 but not exceeding K10,000,000   

K170,000.00

 

Income above K10,000,000 but not exceeding K12,500,000

K225,000.00

 

Eligibility for Presumptive Tax

Any business whose annual turnover is less K12.5 million per year is liable to register for Presumptive Tax.

However, a taxpayer may, by notice in writing addressed to the Commissioner General, elect not to be subject to presumptive tax on turnover, in which case the other provisions of this Act shall apply to such person.

Presumptive Tax registration

Registration for Presumptive Tax is free of charge. Taxpayers can register for Presumptive Tax through Msonkho Online or by visiting the nearest Domestic Taxes office. MRA issues a Taxpayer Identification Number (TPIN) on registration that should be used on any correspondence with the Authority.

Documents required for Presumptive Tax registration

  •    National ID
  •    Business registration Certificate

Payment of Presumptive Tax

Income tax is due quarterly and annually at the rates specified under Presumptive Tax rates.

Submission of Presumptive tax returns

Taxpayers under Presumptive Tax will not be required to submit returns.

Taxpayers can submit their Presumptive tax returns at their nearest Domestic Taxes offices such as Blantyre, Lilongwe, Mzuzu, Zomba, Karonga, Mangochi, Dedza, Mzimba, Mulanje, Salima, Balaka, Kasungu and Dwangwa.

Taxpayers can also submit their tax returns at Customs & Excise stations at Chitipa, Nsanje, Mwanza, Liwonde, Chiponde and Muloza.

Submission of Presumptive Tax returns online

Taxpayers can also submit Presumptive Tax returns through email. MRA is currently implementing Msonkho Online which would allow taxpayers to submit returns online. Msonkho Online is a computer-based platform which allows online tax transactions.

Late submission of Presumptive Tax returns

Taxpayers who fail to meet their tax obligation to compile and submit their tax returns when due would be penalized accordingly. The penalty would be K300, 000 for companies and K75, 000 for individuals for the first month or part thereof.

Any further delay for the above would attract MK50, 000 for companies and K10, 000 for individuals on top of the MK300, 000.00 for companies and the MK75, 000 for individuals or part thereof for the return that remains un-submitted.






learn more on how to register on Msonkho Online Click Here.


Employee Registration Forms

Submit Employment Forms here WhatsApp numbers: 0997 222 835 -
   0997 222 836

Know Your Customer (KYC)

Calculators and services

Terms and conditions apply

Exchange Rates

    USD - 1036.25
    GBP - 1220.07
    ZAR - 60.39
    EUR - 1069.79
    CAD - 782.07
    JPY - 7.23
    AUD - 696.68