The Tonse Alliance led government has increased the tax free band from 45 000 to K100 000.
This was revealed by Finance Minister Felix Mlusu on Tuesday while presenting the four month provisional budget.
Mlusu says the increased is a deliberate move by government to ensure that Malawians have enough money in their pockets to purchase cheap fertilizer at K4 495 per 50kg bag.
"Each person will be allowed to buy at least 2 bags," he said.
So what does the extension of tax free threshold base to K100 000 mean?
1. It means that those whose salary was below K100 000.00 will no longer be paying Pay As You Earn (PAYE) tax. Whatever your salary, you shall only be expected to make pension contribution but payee has been relieved from you.
2. Those whose salaries were above K100 000, from July, 2020, they shall be getting excess of K17 500 which was PAYE for the first K100 000 of their salary.
3. Besides, everyone who was receiving salary of K35 000 will be taking home K50 000 as minimum wage has been raised to K50 000