CRS News Flash 09 June 2023 – MALAWI – Taxation Act Amendments

TAXATION ACT AMENDMENTS
It is important that employers note the following:

Amendments to the Taxation Act, 2023

The Income Tax (PAYE) (Deduction and Payment) (Amendment) Rules are the subject of Notice No. 17 of the gazette supplement.

The principal rules are amended in rule 6 by deleting subrule 3 and inserting new subrules (3), (4) and (5) as follows:

·        “Every employer shall, within 14 days after the end of each month, furnish the Commissioner General with a return form setting forth the name and address of every employee, the emoluments paid or payable to him and the total amount of tax deducted from such emoluments.

·        A person who fails to submit the return shall be liable to a penalty of K300,000 for companies and K75,000 for individuals for the first month, or a further penalty of K50,000 for companies and K10,000 for individuals for each month thereafter during which the failure continues.

·        The Commissioner General may reduce or waive the amount of penalty if a satisfactory explanation for the delay is given.”

The Taxation (Fringe Benefits Tax) (Information and Payment) (Amendment) Regulations, 2023 are the subject of Notice No. 18 of the gazette supplement.

The regulations are amended by deleting regulation 6 and replacing it with a new regulation 6, as follows:

·        “The sums due as fringe benefits shall be paid to the Commissioner General on a quarterly basis, not later than 14 days after the end of each quarter of a period of twelve months ending 31 March each year and the remittance of such sums shall be accompanied with a duly completed fringe benefits tax return in Form FBT 2 set out in the Schedule.

·        A person who fails to submit a fringe benefit tax return shall be liable to a penalty of K300,000 for companies and K75,000 for individuals or part thereof. A further penalty of K50,000 for companies and K10,000 for individuals during which the failure to submit a fringe benefit tax continues.

·        The Commissioner General may reduce or waive the amount of penalty if a satisfactory explanation for the delay is given.”