Audit, tax and business advisory firm, Deloitte has said it expects the Treasury to contain possible fiscal pressure and thrive at spending within set ceilings when implementing the recently approved 2019/20 National Budget.
Addressing clients during a tax update seminar in Blantyre, Deloitte Partner (Tax and Advisory), Nkondola Uka, said the industry expects the government to operate within set budget framework and make the most of new tax reforms in revenue collection.
“There has been some re-alignment and in a way it is positive. If you look at budget framework and implementation, that is one area the industry has been asking the government to walk the talk in terms of controlling expenditure and collecting enough resources,” Uka said.
Earlier this month, Parliament passed the K1.7 trillion 2019/20 National Budget which has several new tax measures.
One key highlight of the budget is the 28.5 percent adjustment of the pay as you earn tax free bracket from K35 000 to K45 000.
The Government has also increased the minimum wage to K1,346 per day (K35,000 per month) from K962 per day (K25,012 per month).
Finance Minister Joseph Mwanamvekha also announced removal of value added tax on solar and gas equipment, laundry soap in bars, among others,
The government has also introduced a surcharge on imported goods that have local substitutes including vegetables, sugar, cooking oil and cement, among other.
Uka then said if implemented well, the tax reforms in the current budget would help stabilise revenue collection base for the Government and ease pressure on the budget.
“We are looking forward and we will be checking on that but we would have to make sure that other factors are also in place.
“At the moment we have a political situation where we still have uncertainties, it is important for the economy to have certainties. We look forward to solution to the political issues,” Uka said.
Commenting on economic outlook, Deloitte Tax Manager, Sarah Chikadya, said in line with statements made by the finance minister, the firm expects continued lowering of inflation among other possible impacts of the reforms.
“The outlook is positive for the economy on the understanding that the Government will fulfill the pledges made in the 2019/20 budget,” she said.
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