MRA collects K391bn in 2022/23 third quarter
Malawi Revenue Authority (MRA) has collected K391.89 billion in the third quarter running from October to December of the 2022/23 financial year, missing its target by K4.73 billion.
In a revenue performance quarterly update press briefing yesterday in Blantyre, MRA Commissioner General John Biziwick said the tax collector had a target of K396.63 billion in the quarter under review.
But for January 2023, which is the first month of the fourth quarter of the 2022/23 financial year, MRA made a surplus of K16 billion, having collected K161.6 billion from a target of K145 billion.
Biziwick said intermittent power supply, delays on the implementation of tax stamps and remittances by government, ministries, departments (MDAs) and agencies has negatively affected tax revenue performance in the third quarter.
He said despite a challenging environment, MRA is banking on some policy changes and good performance of other sectors, including the financial sector.
Biziwick said: “The revision of the paye [Paye] as you earn tax bracket last year, the introduction of advance income tax on imports and the sound performance of the financial sector pushed up the magnificent performance. There is a general improvement of tax collection now.”
During the quarter under review, MRA beat its Paye and advance income tax target by K90.6 billion and K1.86 billion, having collected K4.6 billion and K1.4 billion, respectively.
But the Authority lost an opportunity to collect K1.7 billion from delays in the implementation of the tax stamp and presumptive tax and another K5.3 billion from delays in remittances by government and MDAs.
In addition, large and small firms operating in the country were faced with prolonged power outages exacerbated by the shutdown of Kapichira Hydro Power Plant in January that led to the loss of 129 megawatts (MW).
The shutdown left Malawi with an average of 193 MW of electricity. The situation caused companies to post operational losses as they were coughing about K260 million a day to run generators.
Roughly, this translated to K7.8 billion monthly and K93.6 billion annually, according to the Malawi Confederation of Chambers of Commerce and Industry.
However, Biziwick remains upbeat going forward, saying they are banking on increased tax enforcement, follow-ups on filing, audits and debt collection to beat the fourth quarter target of K388.05 billion.
In the first quarter MRA collected K355.6 billion, missing its target of K536.01 billion while in the second quarter, the tax collector surpassed its target of K386.58 billion having collected K393.79 billion.
This means that in the nine months to the close of the 12-month 2022/23 financial year, MRA has collected K1.3 trillion.
At the end of the 2022/23 fiscal year, domestic revenue is projected to go down from K1.636 trillion to K1.628 trillion. Domestic revenue is expected to dominate at K1.534 trillion while other revenues will amount to K94.4 billion.
Malawi University of Business and Applied Sciences economics professor Betchani Tchereni said while it is a good thing that MRA is able in some cases is able to beat its targets, it calls for little celebration.
“If we compare the collection with what we really need, we won’t be celebrating. The budget is so huge that we have been financing the budget with debts,” he said.
Meanwhile, MRA has clocked 23 years of operation having opened its doors on February 15 2000.
Looking back, Biziwick said MRA has seen its tax collection rise from a mere K14 billion to over K1.4 trillion with a lot of new electronic systems introduced to replace paper-based filing systems.
MRA was established as an agency charged with responsibility of collecting tax revenues, a function that was formerly under the Customs Office and the Income Tax Department.
