President Lazarus Chakwera says he will discuss Malawians’ concerns over the new Pay As You Earn (PAYE) system with Minister of Finance Sosten Gwengwe in order to resolve the issue.
Chakwera made the remarks yesterday during Labour Day Celebrations in Mzuzu.
His administration, in the 2022/2023 budget, introduced a new PAYE system which has seen workers having their salaries reduced.
Under the new system, PAYE is 0 percent for monthly salaries from K0 to K100, 000 but is 25 percent for salaries between K100, 000 and K330,000.
Salaries ranging from K330,000 to K3 million are being charged 30 percent while those from K3 million to K6 million are being subjected to 35 percent PAYE. Forty percent PAYE is being charged on salaries above K6 million.
The PAYE was under the Taxation Amendment Bill of 2022 which Parliament passed and Chakwera assented to in April this year. Following Chakwera’s approval of the bill, salaries of employees in both public and private sector were reduced during the month end of April.
Speaking during the Labour Day commemorations, President of Malawi Congress of Trade Unions Charles Kumchenga said many workers have seen their salaries being reduced by a lot of money due to the PAYE.
“This PAYE needs to be reviewed because workers are being taxed a lot of money,” said Kumchenga.
In his response, Chakwera promised to discuss the issue with Minister of Finance Gwengwe when the Minister returns from a foreign trip.
“When he is giving me a report on his trip I will tell him that I was at the Labour Day event and people were complaining of the PAYE system.
“Even though the budget was passed not long ago, we have to find ways of assisting Malawians’ on this issue without disturbing the budget,” said Chakwera.