Parliament on Tuesday, 30 June 2020 consented the Minister of Finance, Honourable Felix Mlusu to draw and spend a provisional national budget of K722.4 billion in the next four months of the 2020/2021 fiscal year.
Of the amount, K407.3 billion is domestic revenue of which taxes are substantial. The four months start from today, 1 July to October 31 this year.
The presentation of the provisional budget follows the June 23 Fresh Presidential Election that saw His Excellency Dr. Lazarus Chakwera of Tonse Alliance winning to become Malawi’s sixth President.
In his national budget statement, the Minister of Finance, who was sworn in on 29th June 2020 presented various policy changes in line with the new Government’s agenda.
“Madam Speaker, the Provisional Budget has total revenue and grants amounting to K459.1 billion of which K407.3 billion is domestic revenues and K51.9 billion are grants,” said Honourable Mlusu.
He among others announced the increase of the income tax free bracket to K100,000 from K45,000, price reduction of a 50kg of fertilizer to K4,495, proposed minimum wage review toK50,000 from K35,000.
“In fulfilment of the campaign promises, the Government of His Excellency, the State President, Dr. Lazarus McCarthy Chakwera, has taken into consideration the following policy measures…the Malawi Enterprise Development Fund (MEDF) Youth loans provision has been increased from the current K15 billion to K40 billion.
“This amount, Madam Speaker, will gradually be increased to reach K75 billion. With the increased allocation, Madam Speaker, Government is expected to support creation of 200,000 enterprises run by the youths and women,” said the Minister.
Honourable Mlusu said the enterprises in turn are expected to create over 600,000 jobs which will result in increased tax base, creation of more jobs and improved welfare of our people, especially the youths and women. Government will also review the implementation of MEDF loans to ensure that they are depoliticised
He said Government has allocated resources in the Provisional Budget for ADMARC to purchase maize and other farm produce from farmers. In addition to the allocated resources, ADMARC will also be allowed to borrow from the commercial banks thereby providing smallholder farmers with a reliable market to sell their farm produce.
The Minister of Finance said the main budget with detailed information of the fiscal policy will be presented in September 2020.
BY HENRY MCHAZIME