The Malawi Revenue Authority (MRA) has beaten its monthly and quarterly targets but under-performed in import duty and fringe benefit tax (FBT), according to the tax revenue report for September 2013.
The public tax collector has attributed the under-performance in import duty to a “sizable reduction of value of dutiable imports” to K20.2 billion in September 2013 from K23.7 billion the month before.
But MRA has not explained why it under-performed on FBT by K32.5 million in September despite beating its quarterly target of K704.6 million by K248.9 million.
The tax revenue report shows that MRA collected import duty amounting to K3.78 billion against a projection of K4.2 billion, which is 10.96 percent below its projection.
In the first quarter [July—September] of the 2013/14 financial year, the public tax collector collected import duty of K10.2 billion against the projection of K11.4 billion, representing a shortfall of K933 million.
Overall, in September 2013, MRA collected K29.7 billion, representing a 15.3 percent surplus over the projection of the month and an over-performance of 2.9 percent over August 2013.
“The strong performance reflected relatively strong growth in pay as you earn, withholding tax, value added tax (VAT) and excise tax,” says MRA in its analysis of the revenue figures.
According to the figures, total tax revenue collected in Q1 of the 2013/14 fiscal year was K92.28 billion, which is 19.78 percent in excess of the quarterly projection of K77.04 billion.
“The good performance in the month of September and the first quarter of the 2012/13 fiscal year was largely on account of continued economic recovery and the positive effect of tax reforms,” says MRA.
In September, MRA collected K7.2 billion on Paye, representing a 34.12 percent over-performance on monthly projection, a result of what it calls robust performance from the non-volatile base of this tax.
Corporate income tax collections amounted to K4.1 billion in September 2013, an increase of 18 percent above its monthly projection.
“This resulted from strong performance from withholding and provisional taxes owing to stability of its base, largely due to stable fuel and foreign currency supply, and high income from agriculture owing to good tobacco prices,” says MRA.
Under VAT, MRA collected K10.14 billion, an increase of 17.27 percent on the month’s projection.
“The good performance was on account of import VAT, which over-performed its target by 7.06 percent and domestic VAT which over-performed its target by 29.91 percent,” says the MRA analysis.
Excise and other taxes also performed well during the period under review.
Meanwhile, MRA will starting today [Friday, November 1 2013 to January 31 2013] rollout the three-month Voluntary Compliance Window (VCW) to encourage taxpayers to come forward on a voluntary basis to regularise their tax affairs with the government tax collection agency to avoid the payment of penalties, fines and interest.
MRA plans to collect close to K10 billion [$25 million] during this period, according to its commissioner of customs and excise responsible for exports Shadrec Namalomba.