Paragraph 5(e) of the Fringe Benefits Tax Regulations stipulates that where an employer provides a loan to an employee at an interest rate lower than the applicable commercial rate, the resulting interest difference be recognised as a fringe benefit.
All employers should use the rate of 23% to compute the taxable value of the fringe benefit on concessional loans for the quarter ending 31st March 2022 (this included January, February, and March 2022). There has been no change to the rate for the next quarter.
Click here for the MRA Website notice.
Impact of Malawi Interest rate for loans on PaySpace
- The interest rate has been implemented on the system effective January 2022.
- Customers with the fringe benefit for loans have been recalculated.
- No other statutory changes have been announced.
The PaySpace Team