Kandondo unveils K257 billion Malawi budget
Finance Minister Ken Kandodo on Friday made his maiden budget speech when he presented a K257 billion Budget for 2009/10 fiscal year pointing out that the economy will grow 7.9 percent while inflation will stand at an average 9.7 percent.
Presenting the Budget in the national budge, Kandodo told lawmakers:“Despite the global economic downturn, we will record meaningful growth,.”
He announced a 15 percent increase in civil service salaries.
The Finance Minister also announced .tax exemption on purchase of buses, airplane, spare parts for planes, furniture and TV.
In a bid to boost the tourism sector, the Finance Minister also announced tax exemption to hotels of minimum 50 rooms.
In this year’s budget value added tax vat has been raised from 2 million Kwacha to 6 million Kwacha and that government has removed VAT on mosquito and sand fly nets for local production of mosquito nets in a bid to prevent the spread of malaria.
Government has removed duty from rail locomotives, aircraft engines and spare parts saying this measure aims at reducing transport coast.
Increased duty on vegetables, meat, fish, powdered milk, coffee, tea, nuts, spices, potatoes, onions the duty of this commodities now is at 30% from 10% in order to increase production of local products.
Government has removed duty on construction materials, all medical supplies recording duplication, photographic and projection equipment in both film and music industries.
Kandodo who presented his 36 paged budget document for almost one hour and thirty minutes, gave Ministry of Agriculture and Food Security held by President Bingu wa Mutharika a lion’s share in the budget with about K33 billion.
The country’s purse keeper said the farm inputs subsidies will this year not cover the cash crops as it were last year but the program will only cover food crops.
“We are scaling down on the subsidy program mainly because we want to promote mechanized agriculture,” the Finance Minister told Parliament.
He told the lawmakers that the Mutharika administration will spend 17.8 billion kwacha ($127 million) on fertilizer subsidies, down 39 percent from the year earlier.
Kandodo pointed out that the country’s economy is expected to grow in the face of global financil turmoil.
“Malawi’s economy is projected to grow in real terms by 7.9 percent. The forecast is underpinned by expectations of strong agriculture production, (the) imminent start of uranium production at Kayelekera and continued growth in service sectors such as telecommunications,” the Finance Minister said when he presented the budget.
The Ministry of Education has been allocated about K24 billion while subvention on the University of Malawi amount to K32 billion.
Kandodo also outlined that the Ministry of Health will be allocated about K23 billion.
Transport Ministry received about K30 billion while Irrigation has been given K5.78 billion.
Members of Parliament will scrutinize the budget, debate it for the next 21 days before approving it into an appropriation act.
Tagged with: budget, economy, Kandodo, parliament
Reply to Chisomo –
I understand that Michael Saner’s design for the Kangankunde mine project includes a 50MW concentrating solar power (CSP) plant. The mine will take the main load, the extra supply will go into the Escom grid for the greater good of Malawi. It is a pity that the Ministry of Mines has not returned the mineral rights to him yet, even more than 3 years after the Blantyre High Court ordered it to do so.
My Comment on the budget is the rationale of pushing the Tax free portion from K9000 to K10000 which makes additional disposable income of K300 to the employee.the other tax bands remains unchanged in both the value and rates.I find this to be not adequate and not considerate.I would have loved if the next 15% band was also made to be K6000 from the K3000 to increase employees disposable income. My other concern is that of the VAT. What measures have been put in place to ensure that the final consumer does not suffer from this baring in mind that most wholesalers will suffer the tax and charge the same to the retailers,translating into the final consumer suffering the tax?