JB, Police, MRA thought or thought they had thought

One hot Saturday afternoon in Blantyre, Malawi President Joyce Banda thought or thought she had thought or indeed thought of thinking—depending on her version and that of her spin doctors—that she knew who gunned down Treasury budget director Paul Mphwiyo last Friday night as he was driving through the gate into his home.

Three days later, on Tuesday last week, she disappeared into thin air—literally—only to be spotted at a New York hotel in the United States of America preparing to attend the United Nations (UN) General Assembly that is several days away as the meetings only start sometime next week.

By the time of her departure, the Mphwiyo assailant(s) remained a closely guarded presidential secret.

If it were not for her presidential immunity, she should have been arrested for concealing evidence.

Instead, she booked the next available plane and off she went to enjoy her immunity and Western adoration as one of the few women to head a State, albeit without winning a presidential election.

You would expect the Head of State to be exemplary in demonstrating good citizenship by simply mentioning to Inspector General (IG) of Police Lot Dzonzi the name of the person who she thought or thought she thought had tried to assassinate the man at the centre of the country’s fiscal policy and, at a broader level, her economic agenda.

But just like the matter of declaration of her assets, she does not want to set the moral example she has to as a leader.

She is waiting for a law to be put in place to facilitate her wealth disclosure. But then, there is already a law that talks of revealing evidence to the police.

Is that law an opinion that she cannot abide by as she argues against those who say Mrs. Banda has a moral responsibility to direct Parliament or the Office of the President and Cabinet (OPC) to publicise the assets she declared?

Then there is the IG himself who thinks or thinks he thinks he has in his custody some three characters that may or may not be involved in the Mphwiyo saga.

But the IG refused to name the suspect, explain their linkage to the crime, whether they have been charged, their alleged offence and indeed when they will appear in court—of course, as we went to press, we heard that two suspects had appeared in court on Thursday.

Enter Malawi Revenue Authority (MRA).

The tax collector thinks or thinks it thinks it has been collecting above target. That maybe true on the surface or to a superfluous eye. The authority reports that it collected K29 billion in August, approximately 12 percent above target for the month.

In a statement, the body explained that the strong performance in the revenue collection reflected relatively strong growth in pay as you earn (Paye), withholding tax and value added tax (VAT) largely on account of good economic performance.

If you look at this information, it points to the fact that the majority of the taxes are being squeezed the easy way from citizens’ already dwindling real incomes and not from what I can call wealth generating endeavours.

The fact that MRA struggled in excise tax where it collected 7.2 percent below its August projection, wobbled on fringe benefits, company assessment and import duty—the real work when it comes to tax collection—points to general weaknesses in overall organisational performance.

There are also hard efficiency questions that MRA and tax policy makers have to answer. For example, what is the trend in terms of how much the authority spends to collect taxes?

Three years ago, when I was at the Ministry of Finance, I remember that MRA used to spend three tambala to collect K1 of tax. Today, I have it on good authority that the body spends five tambala to collect K1. Is MRA beating the targets cost effectively?

We also need to look at the money collected in real terms not the nominal figures that folks at Msonkho House are feeding us.

The simplest way of looking at the money in real terms is to convert the money collected into dollars and you will see that MRA’s performance has dropped sharply. For instance, three years ago, MRA would—in dollar terms—give the Secretary to the Treasury (ST) $106 million dollars a month on average.

Today, in dollar terms, the authority only manages to give the ST an average of $76 million per month. Where is the performance here?

The authority is grossly underperforming and hides its incompetence in kwacha reports. Is it any wonder that today, we are relying more and more on donors to fund our drug budget, the Farm Input Subsidy Programme (Fisp) and to pay for our fuel? The fact that donor contribution to the National Budget is back to around 40 percent is not because Western capitals love Joyce Banda. It is because MRA is underperforming—and miserably so—in tax revenue collection in real terms.

And they think or they think they think they are all clever! Whew!

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