Government has succumbed to public pressure on the implementation of the proposed 1.0 percent withholding tax on non-bank mobile money transactions.
Minister of Finance Joseph Mwanamvekha, the aim behind the introduction of the tax on mobile money transaction was to ensure that a large number of the citizens contribute towards the national budget.
But Mwanamvekha told Parliament that government has rescinded the move in order not to overburden subscribers.
“Obviously after we consulted a number of stakeholders and also taking into account the responses that we received from the August House we thought that maybe we need to take into account the input that we have received.”
He said instead government will apply 20 percent withholding tax on interest earned by Trust Funds and commissions to Mobile Network Operators.
Several sectors of the economy including the Consumers Association of Malawi (CAMA) were against this plan which if effected could have increased the tax burden on poor Malawians.