Malawi Revenue Authority (MRA) has missed its revenue collection target for April 2015 by K3.1 billion (US$6.9 million) by collecting K 47. 06 billion (US$104.6million) against its projected target of K50.21 billion (US$111.6million), according to a published revenue performance report.
The public tax collector has blamed the deficit on underperformance of corporate tax and international taxes, which could not be compensated by the strong performance from individual income tax receipts.
MRA said revenue projections for the month were revised upwards by K2.02 billion to K 50.21 billion based on short-term economic gains, which the country experienced in the last half of 2014 and could not be sustained in 2015 due to the prevailing economic climate.
The report shows that all tax components under the corporate tax underperformed with provisional tax, registering a 40 percent shortfall than anticipated.
“Provisional tax underperformance is mainly due to businesses scaling down their profitability expectation having experienced the slowdown in economic activities while for other taxes, withholding taxes, for instance, could be as result of non-cash payment of government to most good and services suppliers,” said the report.
Excise duties overall collection registered 17 percent below the target of K3.77 billion, according to the report.
Both domestic and import excise underperformed in the month largely attributed to the underperformance in domestic tax due to the suspension of excise tax payments on carbonated drinks and court restraint on plastics.
However, despite the underperformance in most of the taxes, value-added tax (VAT) registered a strong performance at K15.3 billion, against the targetted K13.14 billion.
MRA said the good performance was on account of domestic VAT, which registered a positive growth of 47.2 percent above the target.
“The over performance was on account of strict enforcement of electronic fiscal devices, which is now covering almost all business,” said the report.
However, import VAT performed below the monthly target of K700 million, which reflects a slowdown in importation of goods as the figures indicate that import volumes for April 2015 was 4.6 percent down compared to the same period last year.
