Malawi/Zambia/Mauritius – recent legislation changes

Malawi/Zambia/Mauritius – recent legislation changes

Business, Legislation


Malawi PAYE changes

With reference to the Provisional Budget Statement for Malawi 2020/2021 and an announcement made by the Finance Minister on 11 September 2020, the Malawi Government has proposed an increase in the PAYE tax-free bracket.

Conflicting information has been published regarding the increase. Upon enquiry, the Malawi Revenue Authority confirmed the increase of the tax-free bracket from MK45,000 to MK100,000 per month, effective 1 October 2020.

Kindly note that a government gazette confirming the changes is not yet available and the changes are subject to approval.

The Minister also announced that the middle tax bracket of 15% has been removed. He is quoted as stating: “Government is aware that this adjustment is huge and to minimise its impact on the base for Personal Income Tax, the 15% middle bracket under the Pay As You Earn regime has been removed.”

This was not mentioned in the Provisional Budget Statement or the Budget Statement, therefore it cannot be confirmed.


Mauritius Training Levy

The Finance (Miscellaneous Provisions) Act 2020 (Act 7 of 2020) was published in a Legal Supplement in August 2020. The Legal Supplement includes amendments to various Acts, such as the Income Tax Act and the National Pensions Act. Amendments to the Income Tax Act describes the changes to the Solidarity Levy, while the National Pensions Act was amended to include the new Contribution Sociale Genéralisée (CSG).

In addition, the Human Resource Development Act was amended to announce changes to the National Training Fund levies.

Previously, every employer was required to pay a training levy at the rate of 1.5% of the total basic wage or salary of its employees. For the period July 2019 to June 2020, an employer was required to pay the levy at the rate of 1% for employees whose total basic wage or salary did not exceed Rs 10,000.

As from 1 July 2020 to 30 June 2021, every employer must pay a training levy of 1% in respect of every employee.


Mauritius Portable Retirement Gratuity Fund (PRGF)

On 3 September 2020 the Ministry of Labour, Human Resource Development and Training circulated communication regarding the further postponement of the PRGF.

The obligation to submit monthly PRGF returns and make payment of contribution has been postponed to January 2022. Employers may opt to file the monthly PRGF return and make payment of PRGF.

However, as a result of the negative impact of COVID-19, employers may, during the period 1 January 2020 to 31 December 2021, in the event of justified dismissal or resignation of an employee, pay directly to the employee, with his consent, the PRGF amount due to the MRA.

Employers have a legal obligation to submit an exit statement to MRA in respect of that employee. The Ministry of Social Security will thereafter notify the employer of the amount of PRGF to be paid in respect of past services of that employee.


Mauritius CSG, NSF and Training Levy

The Mauritius Revenue Authority (MRA) has published a notice to inform employers that, following the introduction of the Contribution Sociale Généralisée (CSG), the deadline for the submission of the monthly contribution return and payment of contributions for the month of September 2020 is Monday, 30 November 2020.

The monthly contribution return includes contributions in respect of the following:

  • Contribution Sociale Généralisée (CSG);
  • National Savings Funds (NSF); and
  • Training Levy.

The deadline for the submission of the monthly contribution return for any subsequent month is the end of the following month.

The facility for the submission of the monthly contribution return and payment of the contributions is available on MRA’s website,  and through the Mauritius Network Services (MNS).

Employers are informed that the facility to file the joint PAYE/Contribution Return for the month of September 2020 and onwards will continue to be available on MRA’s website.

No penalty and interest will be applicable for late payment of PAYE for the month of September 2020 where the return is submitted and payment is made on or before Monday, 30 November 2020.


Zambia 2020/2021 Budget Speech

On 25 September 2020 the Zambian Minister of Finance delivered the 2021 budget to the National Assembly with the theme “Stimulate Economic Recovery and Build Resilience to Safeguard Livelihoods and Protect the Vulnerable”.

Proposals made affecting employers/employees are:

  • An increase in the annual tax exemption threshold for PAYE was proposed from K36,000 to K48,000 and the adjustment of tax bands.

The proposed measure is aimed at increasing taxpayers’ disposable income.

  • Reference interest rate applicable on employee loan interest benefit.

The Minister proposes to adjust the reference interest rate to be used in the determination of tax applicable on employee loan interest benefits to be the Bank of Zambia policy rate plus a margin of 2.0%.

This will allow for uniformity of interest rates used for assessment of the loan benefit.

To read the full text of the Budget Speech, follow the link.