Malawi accountants urge govt. to raise tax free band to K25,000

Minister of Finance Ken Lipenga on Monday started pre-budget consultations with various stakeholders in Blantyre ahead of the 2013/2014 budget session and met with the Society of Accountants in Malawi (Socam) which urged the government to raise the tax free band from the current K15,000 to K25,000.

Socam observed with the devaluation of the Kwacha last year, the cost of living has drastically increased such that after conversion of the currencies involved, the threshold in Malawi is seen to be much lower than in other countries.

The body also asked the finance minister to remove the income tax on pension income in the 2013/2014 national budget.

“The threshold bears no semblance of linkages to the monthly outgoings for a family in a city published monthly by the Centre for Social Concern (CSC), the CSC expenditure basket is currently above K50,000. It includes no luxuries, but even so it does incorporate some amount of indirect taxation, mainly VAT and the impact of duties and levies on transport costs,” reads Socam’s statement in part, which was then presented to Lipenga by Andrew Chiwoko, Socam Taxation Committee chairperson.

Lipenga : At budget consultation meeting

Lipenga (C) : At budget consultation meeting

However, Lipenga observed there is no adjustment path that can totally eliminate all hardships or compensate everyone.

He further claimed that the path government has taken would lead to the stabilization of the economy, but without sacrificing social and spending or compressing growth.

Lipenga is also expected to conduct similar meetings in Mzuzu and Lilongwe on April 10 and April 12, 2013 respectively.

He said his ministry consults a wide range of stakeholders across the country in order to reflect the priorities and concerns of Malawians in the national budget.

“The consultations provide a consistent and coherent economic policy framework to underpin our development objectives,” said Lipenga.

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