04 March 2024

Malawi decreased the withholding tax for mobile money agents from 20% to 1%, as per Simplex Chithyola Banda, minister of finance.

According to Chithyola-Banda, this will comply with the current withholding tax rate for banks and insurance brokers, which is 1%: “this is being done to align with the prevailing withholding tax rate for banks and insurance agents, which is at one percent. In addition, most of the mobile money agents do not make enough money to pay personal income tax as their income falls below the minimum threshold of paying personal income tax.”

Lumbani Gondwe, country manager at Flutterwave, applauded the reforms, saying that majority of mobile money agents were not making enough money, which impacted the profitability of their businesses.

“What this means is that they (agents) will be able to earn more money from commissions, making their business more successful. They will be able to finance their expansion and hire more employees,” said Gondwe. “Mobile money is the most popular digital payment method in the country. I’m betting that eight out of ten transactions are mobile. Even while mobile money is higher than card payments around the world, it is certain that it will continue to develop in our country because it is the only digital payment channel with a nationwide presence.”