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Malawi

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About

Malawi

Capital
Official languages
Population 
Currency

ISO 4217

Lilongwe

English and Chichewa

18,091,575 (as of July 2020)

Malawian Kwacha

MWK

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Economy

Malawi is a small landlocked country in southeastern Africa with a population of approximately 18.09 million people. The economy of Malawi is largely based on agriculture, which accounts for about one-third of the country’s GDP and employs about 80% of the population. The country’s main exports are tobacco, tea, sugar, and coffee. Malawi’s GDP in 2019 was estimated at $7.9 billion, with a growth rate of 3.7%. The inflation rate was 8.2%, and the unemployment rate was estimated at 8.2%. The country’s public debt was estimated at 56.2% of GDP in 2019. Malawi’s main trading partners are South Africa, India, and the United Kingdom. The country has received significant foreign aid from the World Bank, the International Monetary Fund, and other international organizations. Malawi has made progress in reducing poverty and improving access to basic services, but the country still faces significant challenges in terms of economic development.

Taxation

Taxation in Malawi consists of both corporate and personal taxes. Here is an overview of the taxation system in Malawi:


Corporate Taxation:

- Companies in Malawi are subject to a corporate income tax rate of 30% on their profits.

- Corporate tax returns must be filed annually by 30th September of the year following the tax year.

- The payment of corporate income tax is due by the same deadline as the tax return filing.

- Small and medium-sized enterprises (SMEs) with an annual turnover of less than MWK 100 million (approximately USD 130,000) are eligible for a reduced tax rate of 20%.


Personal Taxation:

- Individuals in Malawi are subject to a progressive personal income tax rate that ranges from 0% to 35%, depending on their income level.

- Personal income tax returns must be filed annually by 30th June of the year following the tax year.

- Personal income tax payments must be made in two installments: the first installment by 30th June and the second installment by 31st December of the year following the tax year.


Value Added Tax (VAT):

- Malawi imposes a value-added tax (VAT) on most goods and services, except for a few exempt items.

- The VAT rate in Malawi is currently 16.5%.

- VAT returns must be filed and VAT payments must be made monthly by the 25th of the month following the tax period.


Tax Payment Process:

- Taxpayers in Malawi can make tax payments through banks or online payment systems.

- Taxpayers must file their tax returns and make their tax payments by the deadlines mentioned above.

- The Malawi Revenue Authority (MRA) may conduct audits to ensure compliance with tax laws.


In summary, companies in Malawi are subject to a corporate income tax rate of 30%, while individuals are subject to a progressive personal income tax rate that ranges from 0% to 35%, depending on their income level. Both companies and individuals are required to file their tax returns and make their tax payments by specific deadlines. Malawi also imposes a value-added tax (VAT) on most goods and services. Tax payments can be made through various methods, and taxpayers may be subject to audits to ensure compliance with tax laws.

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