News Flash 7 March 2024 – EGYPT – MALAWI – NAMIBIA – Tax changes announced
MARCH 2024 – EGYPT | MALAWI | NAMIBIA
TAX CHANGES ANNOUNCED
It is important that employers note the following:
EGYPT
New Income Tax Law No. 7 of 2024
Egypt’s Ministry of Finance has released the Income Tax Law No. 7 of 2024, amending the already existing Law No. 91 of 2005 pertaining to income tax. The changes are effective from 1 March 2024.
Tax Law No. 7 of 2024 raises the threshold for the tax-exempt bracket for annual income from EGP30,000 to EGP40,000.
In addition:
The annual personal exemption limit has been changed from EGP15,000 to EGP20,000.
The annual personal exemption limit for a person with disability or caregiver for a person with disability has been amended as 1.5 times annual personal exemption. For this reason, the annual personal exemption cap in this instance would be EGP30,000.
The newly adjusted brackets are as follows:
The annual taxable income should be approximated to the nearest lower EGP10.
Taxpayers with a higher net taxable income are not allowed to make use of the lower tax brackets:
The annual net taxable income ranging between 600,000 and 700,000 is not eligible for the 0% tax bracket.
The annual net taxable income ranging between 700,000 to 800,000 is not eligible for the 0% and 10% tax brackets.
The annual net taxable income ranging between 800,000 and 900,000 is not eligible for the 0%, 10% and 15% tax brackets.
The annual net taxable income ranging between 900,000 and 1,200,000 is not eligible for the 0%, 10%, 15% and 20% tax brackets.
The annual net taxable income above 1,200,000 is not eligible for the 0%, 10%, 15%, 20% and 22.50% tax brackets.
The new tax law, which can be accessed here, is only available in Arabic.
MALAWI Budget Statement and proposed tax changes
The Minister of Finance and Economic Affairs, Honourable Simplex Chithyola Banda, delivered the Budget Statement for 2024/2025 on 23 February 2024.
Highlights
Major assumptions for the 2024/2025 budget:
Real GDP growth rate of 3.6%;
Average inflation rate of 23.4%;
Tax refunds of 3% of total tax collection.
Domestic revenues are estimated at K3.38 trillion, representing 18.1% of GDP.
The budget deficit for the 2024/25 fiscal year is expected to be 1.43 trillion kwacha ($858 million), which is 7.6% of Malawi’s gross domestic product (GDP), compared to 8.9% of GDP in 2023/24.
Government will allow 100% deductions for monetary donations to calamities made through the Department of Disaster Management and 50% deduction on the cost of a private sector-drilled borehole.
Tax proposals
To align with the 15% tax rate on investment of pension funds, government has reduced the withholding tax on interest realised from investments of life assurance from 20% to 15%.
Further, the government is amending paragraph (i) of the Eleventh Schedule to clarify that the 15% income tax rate on pension funds only applies to the return on investment of pension funds and not to the income of the Pension Fund Managers which attracts 30% corporate income tax.
The government will increase the zero Pay as You Earn (PAYE) bracket from MK100,000 to MK150,000.
Accordingly, the next MK350 000 will be taxed at 25%, while the next MK2 050 000 will be taxed at 30% and MK2 550 000 will be taxed at 35%.
The new monthly PAYE structure will be as follows:
The Value Added Tax (VAT), income tax and administrative measures will take effect on 1 April 2024 upon the passage of the relevant bills by parliament and the assertion by the president.To view the Budget Statement, follow the link.
NAMIBIA Budget Statement and proposed tax changes
The Minister of Finance and Public Enterprises, Iipumbu Shiimi, presented the Budget Statement for 2024/2025 on Wednesday, 28 February 2024.
Highlights
The country expects to see economic growth of 5.6% for last year and 4.0% this year, up from projections of 3.5% and 2.9%, respectively, made in October.
The budget deficit for the 2023/24 fiscal year is seen at 3.2% of gross domestic product (GDP), down from an October estimate of 4.2%, and should stay at 3.2% of GDP in 2024/25.
Income tax on individuals is estimated to increase by N$1.3 billion.
The mandatory VAT registration threshold will be increased from N$500,000 to N$1,000,000, effective FY2024/2025.
In the coming year, together with the Namibia Revenue Authority (NamRa), the government will introduce a VAT e-invoicing system to integrate cash registers to businesses.
Old age grants and disability grants will be increased from N$1,400 to N$1,600 per month, effective 1 April 2024.
Reduction of the non-mining company tax rate to 31%, effective in April 2024 and further to 30% in April 2025.
Introduction of a Special Economic Zones (SEZ) regime with a corporate income tax rate of 20%.
Introduction of a Youth Employment Tax Incentive targeting about 5,075 job opportunities annually at a cost of N$50,000 per intern per year.
Tax proposals The 2024/2025 budget made provision to provide tax relief for low income earners.
The threshold for income tax on individuals will be increased from the current N$50,000 to N$100,000. Effectively all individual taxpayers will be exempt from paying tax on the first N$100,000 of their income as from 1 March 2024. The revised tax tables will be published accordingly.
Further adjustments to tax brackets will be made to counteract inflation over the next two fiscal years.
It’s interesting to note that should these tax adjustments be implemented it will be the first time since the 2013/2014 fiscal year.
