Low paid workers in Madagascar may soon see more tax taken from their wages. The draft finance bill for 2027 would raise the monthly minimum collected under the IRSA, the tax on salaries and similar income, from 3,000 to 5,000 ariary. The brackets themselves would not change. Only the minimum payable goes up, which means employees whose calculated tax currently falls below 5,000 ariary would be the ones paying more.
For those workers the increase comes to 24,000 ariary a year. The Treasury expects the change to raise 4.8 billion ariary.
Economy and Finance Minister Herinjatovo Ramiarison argues that the adjustment is reasonable, since the minimum was last revised in 2022. The minimum wage has risen to 315,000 ariary in the meantime, and the new floor would represent about 1.6 percent of it. His ministry also moved to correct reports circulating on social media that the IRSA was set to rise by 67 percent. Officials say the measure is meant to encourage tax compliance as much as to raise revenue.
Workers’ representatives are less convinced, according to L’Express de Madagascar. Their concern grows when the payroll measure is read alongside the rest of the bill. The biggest change targets diesel, with the petroleum products tax climbing from 228 to 503 ariary per litre, a rise likely to push up transport costs and, eventually, food prices.
Local manufacturers stand to gain from other provisions. Where a product is already made in Madagascar, customs duties on competing imported finished goods would increase from 20 to 30 percent, affecting items such as biscuits, drinks, canned fish and soap. The government also hopes to collect an extra 57.9 billion ariary by extending electronic invoicing across the economy.
The International Monetary Fund disbursed 155 million dollars to Madagascar about ten days before the debate opened and reminded the authorities of their commitment to budget discipline. Growth is forecast at 5.1 percent in 2027, compared with an estimated 4.1 percent this year.
Members of parliament still have to examine and vote on the text. The National Assembly currently exercises legislative power alone, and if it does not adopt the budget before the session ends, the government can put its provisions into force by ordinance.