The Malawi Revenue Authority, (MRA) has collected in excess of K52 billion ($99.3 million) in July 2015, about K100 million above the month’s target.
In a published performance report signed by commissioner general Ralph Kamoto, MRA said tax revenue amounted to K52.14 billion ($99.5 million) representing a 27 percent growth above June 2015 outturn on the account of a Pay As You Earn (Paye) fringe benefit tax (FBT) and import VAT and dividend tax.
The revenue agency collected K30.72 billion ($58.6 million) under income and profit, representing a surplus of 15 percent over the projection of K26.79 billion ($51.2 million).
In July, K17.66 billion ($33.7 million) was collected through PAYE, which is 60 percent higher than the previous month’s collection.
MRA said Paye over performed because of June’s PAYE from government, which has been collected in the month of July 2015.
MRA has also indicated that it collected a total of K920 .65 million ($1.8 billion) on account of other taxes, which was 31 percent above the expected level for the month and was propelled by impressive growth in dividend tax, turnover tax and penalties.
Despite the good performance, the analysis indicates that excise duties collected during the month under review totalled K3.84 billion ($7.4 million), a 37 percent drop for the month’s target largely due to a 23 percent underperformance in import excise exacerbated by a 58 percent deficit in domestic excise.
“Local excise underperformed due to outstanding court cases which are restraining MRA from collecting the tax. Revenue targets for July assumed that court cases would have been resolved by July,” the report reads in part.
Similarly, value added tax (VAT) underperformed by 10 percent, as compared to its target of K13.40 billion. Domestic VAT also underperformed by 25 percent.
“In the short term, the unfavorable economic conditions which led to depreciation of the kwacha benefited import VAT while being unfavourable to domestic VAT through price hikes,” said the report.
In past six months, MRA has been missing its projections a situation which an analyst accounted on private sector’s failure to perform to its full potential due to unsettled arrears of over K150 billion owned by government.
But another analyst cautioned that it could a challenge to raise more revenue during the period considering that many businesses might not perform well in the first quarter of this first year due to the negative impact of the floods on the economic performance.