LILONGWE-(MaraviPost)-Malawi Building and Civil Engineering Contractors and Allied Trades Association (MABCATA) on Tuesday, August 15, 2023 petitioned parliament over Constructing withholding tax increase from 4 percent to 10 percent.
Presenting the petition to parliament, MABCATA Leader, said Income Tax calculation for Corporate Business is based on Profit and not on Gross Turnover figures and therefore the idea of deducting 10% from certified values for construction business is incorrect and only targets to stifle growth and employment.
He has urged the Parliamentary Committee on Transport & Public Works to brainstorm on the adjusted 10% withholding Tax on the Construction Contractors.
“While we appreciate the efforts taken by the Ministry to widen the tax base that would foster development, we also find the proposed approach of Deducting 10% Withholding Tax on Gross Payments for Contractors and Subcontractors to be insensitive, inconsiderate and punitive,” said Kadango.
He added that profit element is only a small percentage of the overall Contract and by law of Income Tax.
“It is this margin that is taxable not the Gross Contract Value. Corporate Tax is 30 % on profit,” observes Kadango.
He therefore said the association will foster and ensure a smooth, orderly, unified and profitable environment and operations of all local and indigenous Malawian Building and Civil Engineering Contractors as well as those involved in Trades Allied to the foregoing operating in Malawi for the benefit of the members of the Association
Receiving the Petition, Chairperson for Transport and public works, Enoch Phale assured the contractors to present the petition to the August House for better resolution.
Phale said the time government was changing the withholding tax they had good reason.
MABCATA is a registered Organisation and its mandate is currently expressed in its Constitution and its status spelt out in the National Construction Industry Act of July 1996 aims at bringing together the constructors in Malawi.
