Suggested by Ifedolapo Akano – New
As per Legal Reference: Taxation Act – Section 76A(2)
According to Section 76A(2) of the Taxation Act
"The tax payable under subsection (1) shall be deducted from the amount referred to therein upon—
(a) accrual of the amount to such person; or
(b) payment of the amount to such person whether directly to him or to his account in or outside Malawi; or
(c) remittance of the amount to such person; or
(d) crediting of the amount or of the value thereof in favour of such person…”
The use of "or" in this clause indicates that withholding tax is triggered by the earliest of the listed events — whether it is accrual, payment, remittance, or crediting of the income.
This interpretation aligns with the Malawi Revenue Authority's practice and international tax standards, where withholding obligations are typically triggered at the earliest recognition of income, to avoid deferred taxation.
Key Compliance Requirement
In practical terms:
- If a liability is accrued via an invoice, and no WHT is deducted until later payment, the organization may be seen as non-compliant.
- Therefore, our request to calculate WHT at invoice level is to ensure legal compliance and timely deduction, as required by Section 76A(2)(a).
System Expectation
However, the system currently calculates WHT only at payment, which does not satisfy the requirement for invoice/accrual-based withholding under Malawi law.
Request
We request your assistance in identifying configuration changes or hotfixes that will enable WHT to be triggered at invoice posting (accrual) for the Malawi region.
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