Finance Minister Felix Mlusu has announced an increase of tax free band from K45,000 to K100,000, a tax measure which was announced in the K722 billion provisional budget but was not implemented.
Mlusu said when he presented the 2020/21 national budget in Parliament on Friday.
He said government realizes the need to increase disposable income for salaried employees and enhance their purchasing power.
“In this regard, Government has increased the Pay As You Earn zero bracket from MK45,000.00 per month to MK100,000.00 per month,” he disclosed.
The Finance minister said government is aware that this adjustment is huge and to minimize its impact on the base for Personal Income Tax, the 15 percent middle bracket under the Pay As You Earn regime has been removed.
Meanwhile, the fiscal plan has covered a litany of promises that the Tonse Alliance made ahead of the June 23 Fresh Presidential Election as well as in President Lazarus Chakwera’s first State of the Nation Address (Sona) delivered in Parliament last Friday, such as the increase of the tax free band to K100 000 from K45 000 and increase in minimum wage to K50 000 from the current K35 000.
“Under the Tonse Alliance Government, the 2020/2021 budget will focus on: achievement of sustainable and inclusive growth; macroeconomic stability; and sound financial management.
“These objectives will be pursued through transparency and accountability, rule of law, enhanced resource mobilisation, efficient resource utilization and provision of relevant infrastructure,” said Mlusu.
The Finance minister said the 2020/2021 Budget has been developed under the Theme “Living the Promise”.
“Madam Speaker Government has also increased the Withholding tax threshold for casual labour from MK15,000.00 to MK35,000.00 per transaction.
“Government recognizes the need to improve the welfare of the people, especially those that are engaged as casual labourers and earn modest incomes for basic needs,” he said.
Mlusu said government has noted increased participation in betting and gambling transactions including lotteries and in order to ensure taxpayer compliance and encourage submission of income tax returns, a 20 percent withholding tax has been introduced on winnings from betting and gambling transactions including lotteries.Follow and Subscribe Nyasa TV :