Minimum wage increased in Malawi

Advertisement
poverty

Government of Malawi has increased the minimum wage for workers in the country.

This came to light on Friday when the minister of finance, economic planning and development Goodall Gondwe presented the 2017/18 national budget in Parliament.

Goodall Gondwe
Goodall Gondwe: confirmed of the news.

Gondwe disclosed that following consultations with the representatives of employers and employees, government has adjusted the minimum perks from K19,000 to K25,000 per month.

“In consultation with the representatives of employers and employees, the minimum wage has been increased from K19, 000 to K25,000 per month,” Gondwe stressed.

Gondwe also had good news for those earning K30,000 or less as government has increased the tax free income bracket from K20,000 per month to K30,000.

Government has however introduced 35 percent Pay As You Earn (PAYE) tax to those who earn an income salary of above 3 million kwacha per month.
“The increase of the Minimum PAYE threshold from MK20,000 to MK30,000 is expected to cost Government revenue in excess of MK10 billion. It is therefore prudent for Government to explore other means of recouping this loss in revenue. One of the ways of recovering this lost revenue is by bringing in more progressivity in our tax system. In order to improve the distribution of income from the rich to the poor and increase the progressivity of the tax system. Government is introducing an additional bracket of 35 percent on those earning salaried income above MK3,000,000 per month,” said Gondwe.

He however said the tax will not affect those who earn K3 million or above from their own businesses.

The 2017/2018 national budget amounting to K1.3 trillion kwacha has been formulated so that the recurrent expenditure can be fully financed by domestic resources which are expected to total 19.7 percent of the gross domestic product (GDP).