The Employers Consultative Association of Malawi (Ecam) has asked the government to suspend the 16.5% value added tax (VAT) to be levied on pension administration fees, which will be implemented with effect from today (1 September 2020).

The above is contained in a letter from Ecam to the Secretary to the Treasury and Principal Secretary for Labour, as Ecam argues that employers struggle to raise money to pay both pension contributions and the new tax on pension administration fees. “… this will result in decent work deficits with negative implications on national economic growth and creating productive employment.” reads part of the letter by the employer’s association.

The letter to the government follows after a similar call last month, when Ecama called on President Lazarus Chakwera to amend the Pensions Act of 2010. According to the petition sent to the President, the group called for pension funds to be accessed soon after calculations are done by insurance companies and that employees should have a choice of insurance policies to suit their needs. In June this year, it was announced that pensioners will have to wait a little longer before getting their pension as the department of Accountant General attributed the delay to technical problems with the Integrated Financial Management Information Systems (Ifmis).