The Parliamentary Cluster committee on Budget and Finance has asked the Ministry of Finance to consider reducing the Pay As You Earn (PAYE) bracket in order to accommodate civil servants, arguing that most of them receive low salaries.
Chairperson of the Cluster Committee Gladys Ganda said that after scrutinizing the 2022/23 national budget, the cluster noted that the increase in the PAYE bracket is likely to affect the livelihoods of civil servants as most of them earn little salaries.
In the structure effected in 2021/22, incomes between MK100,000 and MK1,000,000 were only subjected to 25 percent PAYE while in the proposed structure, incomes between K330,000 to K3,000,000 attract PAYE of 30 percent.
The Committee said it understands that government would like to recover revenue lost in the previous structure but suggested that government should revise the 25 percent bracket upwards to incomes over MK700,000 and introduce another tax bracket between the 0 and 25 percent bracket.
“This is in the same spirit of making the tax regime more progressive and protecting low and middle class workers including the majority of the civil servants,” said Ganda.
Ganda further said that with the high cost of living in the country, the increase is a burden to most Malawians.
