Finance Minister Simplex Chithyola Banda has announced a projected 4 percent economic growth for 2025 as government engages stakeholders on tax reforms aimed at driving recovery and sustainable growth.
Speaking during pre-budget consultations at Mount Soche Hotel in Blantyre on Friday, Banda said while Malawi continues to grapple with effects of external shocks, including climate-related challenges and the Russia-Ukraine war aftermath, key macroeconomic indicators show signs of recovery.
“Our focus is on promoting growth policies guided by implementation plans of the Malawi 2063. This means strengthening prudent fiscal management, improving domestic resource mobilisation and ensuring debt sustainability,” Banda said.
The Institute of Chartered Accountants in Malawi (Icam) has proposed expanding the tax base through formalisation of the informal sector, particularly targeting online businesses.
Icam Chief Executive Officer Noel Zigowa said: “We need to introduce new higher bands of up to K40 million at 3 percent tax rate under presumptive tax, while offering monthly payment options to ease cashflow burden for businesses.”
The accountants’ body also recommended adjusting the Paye tax-free band to K300,000 to cushion workers against inflation, while introducing tax-free commuter benefits for low-income earners.
Malawi Confederation of Chambers of Commerce and Industry (MCCCI) Chief Executive Officer Daisy Kambalame called for urgent review of policies hampering investment, including the 10 percent additional corporate income tax on profits exceeding K10 billion.
“Given the kwacha’s devaluation and inflation since this tax’s introduction, we propose raising the threshold to K30 billion to encourage investment,” Kambalame said.
MCCCI also pushed for reduced excise rates on local products to promote manufacturing growth and combat smuggling, proposing cuts in excise duty on local fruit wines from 95 to 10 percent.
The finance minister said while not all proposals would be incorporated in the 2025/26 budget, they would guide the ministry’s fiscal policy planning as government works to rebuild the economy
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