Investor Panic Over 30% Tax Proposal Hits MSE Performance

Investors on Malawi Stock Exchange (MSE) have recorded losses in the first quarter of the year, a development the exchange attributes to uncertainty surrounding proposed tax changes.

A market performance report for the period January to March shows that shareholders posted a 3.8 percent loss, a sharp contrast to the 69.52 percent gains recorded during the same period last year.

MSE Chief Executive Officer John Kamanga said the downturn was largely driven by panic selling after government announced plans to introduce a 30 percent capital gains tax.

“The announcement triggered a frantic sell-off of shares on the market,” said Kamanga, adding that government has since revised the proposal to a 2 percent withholding tax.

However, Frank Hawara, General Secretary of the Malawi Minority Shareholders Association of Listed Companies, said there is still uncertainty around how the new tax will be applied.

“It remains unclear whether the 2 percent withholding tax will be deducted from profits or from capital,” he said.

The development marks a notable shift from last year, when the Malawi Stock Exchange ranked among the top-performing markets globally, with investors recording returns exceeding 100 percent.

copies:ZodiakOnline