Find Accountancy, Audit and Tax expertise in Malawi
There is a good choice of accountancy firms in Blantyre and other business centres in Malawi. The sector consists of both local firms and branches of the international accountancy network, including the presence of the ‘Big Four’ firms – Deloitte, PwC, Ernst and Young, and KPMG. The sector is overseen by the Companies Act 1984, which does not enforce the application of International Financial Reporting Standards (IFRS) or other accounting standards. However, the Act does require companies to keep proper accounting records and prepare financial statements. The Society of Accountants in Malawi (SOCAM) is mandated to set accounting and finance standards by the Public Accountant Act. SOCAM has adopted the IFRS in relation to corporate financial accounting in the country. Additionally, since 2001 all corporate entities that are listed in the market are producing financial statements in accordance with IFRS. However, strict regulation enforcing this practice is lacking. Despite this, in the World Economic Forum’s Global Competitiveness Report (2012-13) Malawi placed 56th in the world (out of 144 countries) for the strength of its auditing and reporting standards, with a value of 4.8 out of 7, finding it above the world mean of 4.6. In the 2011 World Bank’s Ease of Doing Business Index the country ranked 132nd in the world (out of 183 countries) in relation to resolving insolvency, finding itself below Zambia in 96th place and Tanzania in 122nd place, but above Mozambique at 143rd.
The relevant professional body is the Society of Accountants in Malawi. The British Council administers exams on behalf of the Association of Certified Chartered Accountants (ACCA), which can be taken in both Blantyre and Lilongwe. One of the main other providers of qualifications is the Malawi College of Accountancy, a statutory body mandated to train people in accountancy and finance, with again a campus in both Blantyre and Lilongwe. It provides training for both ACCA and Chartered Institute of Management Accountants (CIMA) examinations.
Personal annual income in Malawi up to MWK 108,000 is tax free. After this, the next MWK 36,000 is taxed at 15% and over this at 30% (tax year 2010-11). Companies incorporated in Malawi pay tax at 30% on net income, branches of foreign companies at 35%. A standard rate of 16.5% value added tax (VAT) is raised on the sale of goods and services; exports and some goods and services relating to health, education and nutrition are free of VAT. In the 2011 Ease of Doing Business Index the country placed highly at 23rd for paying taxes, ranking above neighbouring Mozambique (107th), Tanzania (129th) and Zambia (47th), as well as South Africa (44th). In the Global Competitiveness Report (2012-13) it came 30th in the world in relation to its total tax rate of 28.2%, two places above the high income economy of Canada with 28.8%, but significantly below Zambia with 14.5% (6th).