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This article highlights the new income tax rates in Malawi effective from April 1st, 2024..................
The Taxation (Amendment) Act, No. 12 of 2024 introduces substantial changes to Malawi’s income tax system effective April 1st, 2024. These changes, designed to lessen the tax burden on individuals, involve an expansion of the tax-free bracket and the removal of the highest tax rate, offering relief across various income groups.
The zero-tax bracket has been increased from MK100,000 to MK150,000 per month ensuring more low income earners are exempt from PAYE. This is a major relief for low wage earners.
The highest tax rate of 40% has been scrapped off; thus now it stands at 35%, which applies to people whose incomes surpass MK2,550,000 per month or MK30,600,000 annually.
The 25% and 30% tax rates apply to income ranging from MK150,000 to MK2,550,000 per month. These brackets ensure progressive taxation, targeting middle and high-income earners while maintaining fairness.
Employers should act quickly to adjust their payroll systems in line with these new tax rates so that their workers’ salaries are adjusted accordingly
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