2018/19 Budget Speech Highlights and Tax Changes
Following the Budget Speech of May 2018, delivered by the Minister of Finance, Economic Planning and
Development, Goodall Gondwe, the following Income Tax measures will be effective 1 July 2018:
- The tax-free income bracket under Pay-As-You-Earn (PAYE) will be increased from MK30,000 to
MK35,000 per month.
Other Highlights of the Budget Speech:
- A real GDP growth rate of 4.1% in 2018 and 6.0 % in 2019.
- An average inflation of around 7%
- The budget (total Expenditure and Net Lending) has been set at K1,504 billion which is 28.2% of GDP
- The budgetary deficit is expected to amount to K242 billion which is 4.5% of GDP.
- The 2018/19 budget includes ambitious youth programmes that are primarily intended to reduce Youth
unemployment. It is for college graduates and non-graduates and has included projects which are
targeting the youth.
- In the 2015/2016 Budget, the Taxation Act was amended to introduce a provision on “Deemed Interest”
where no interest is charged on a loan, and subject such deemed interest income to taxation. However,
due to implementation challenges, Section 27 of Part III of the Taxation Act will be amended to provide
clarity on the targeted taxpayers under this provision and bring fairness on the treatment of domestic
and foreign loans which attract no interest.
- The Taxation Act will be amended to introduce a requirement for the registration of salaried employees
and issuance of Taxpayer Identification Number (TPIN) by MRA.
- Section 39 (e) and (d) of the Taxation Act will be amended to introduce a MK5 million cap on the
allowable deductions for individuals’ donations made to Charitable Organisations and Non-Profit
Institutions approved by the Minister.
Contact our legislation team at firstname.lastname@example.org if you require any additional information.
© 2018 CRS Technologies (Pty)Ltd. All Rights Reserved.