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Icam wants tax free band to hit K50,000

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The Institute of Chartered Accountants in Malawi (Icam) has asked Treasury to consider increasing the tax free band for monthly income to K50,000 in the next financial budget.

Currently, the tax free band is at K30,000.

Icam made the call during the first round of pre-budget consultations organised by the Ministry of Finance.

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In his presentation, Icam Taxation and Economic Issues Committee Chairperson, Andrew Chioko, said the increase will allow tax payers to have more disposable income than is the case at the moment.

He said the cost of living in the country is too high, making it difficult for low income earners to earn a decent living.

Chioko also said the government should manage debt levels and controls instituted in this area to ensure that borrowing is only for production and investment and not consumption.

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He also called on the government to address the persistent blackouts as they have resulted into high cost of production.

“Reality on the ground is that most businesses have not done well during the year, taking into account the slowdown in the economy. The current financial year has seen a crisis in water and electricity which have affected production.

“The government needs to invest heavily in the energy sector in order to spur economic growth. We have already seen investments in the water sector, but infrastructure also needs to be improved as we hear that some water pipes are more than 50 years old,” Chioko said.

He further said the government should control its expenditure by spending based on revenue collected while maintaining equitable collection from tax payers that is free from harassment and bloated assessment estimates.

Chioko suggested to the Treasury to widen the tax base, as tax collection is focused on the few compliant tax payers.

“There is low growth in the manufacturing sector, hence the need to widen the tax base. This could be achieved by re-introducing the voluntary tax window. The window should be for a maximum of twelve months and duly provided [for] in the law.

“Include in the tax net government institutions that are able to achieve surplus or profits for example, Mera and Macra,” he said.

Chioko further suggested the expansion of the manufacturing sector, whereby the government should invest in factory shells

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