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MRA collects K42.2 bn in April

The Malawi Revenue Authority (MRA) collected about K42.2 billion in April, approximately 30 percent above the month’s projected K32.4 billion, according to a recent tax revenue outturn.

The public tax collector in the outturn published last week indicates that cumulatively gross tax revenue up to April 2014 amounted K329.45 billion about four percent above the period’s projection.

Pie chart showing tax lines
Pie chart showing tax lines

The April 2014 tax revenue outturn has further indicated that the good performance was in all the tax lines except international trade, company assessments, miscellaneous duties and penalties.

Specifically, in April 2014, MRA raised about K24.2 billion under income and profits compared to K14 billion collected during the preceding month.

According to MRA, K8.6 billion was collected under Pay As You Earn (Paye) ,beating the month’s target by 27 percent.

MRA also performed above target in goods and services having collected about K15 billion, but did poorly in international trade—import duty and prepayment—having collected about K2.8 billion approximately K200 million below the month’s target due to decline in fuel imports resulting from declining demand.

The tax outturn also indicates that a total of K105.5 million was collected under Voluntary Compliance Window (VCW)—a relief for tax defaulters.

In March 2014, MRA collected over K30 billion about 2.6 percent over the month’s target.

According to the 2013/14 budget statement, Malawi’s total revenues and grants are expected to amount to K603.4 billion.

Total domestic revenues are projected at K363.1 billion, representing 60 percent of total revenue and grants, while K240.3 billion are donor grants, representing 40 percent of total revenue and grants.

But in November last year, donors under the Common Approach to Budget Support (Cabs) announced the withholding of aid due to the Cashgate which has seen government departments struggling to meet budget requirements.

In the wake of the aid freeze, the International Monetary Fund (IMF) advised government to implement an austerity measures.

In the second quarter of the financial year, October to December, total expenditure including net lending and direct payments was projected at K171 billion broken down as K129 billion recurrent expenditure and K42 billion development budget expenditure.

However, the outturn for the quarter indicates that total expenditure for the quarter was K120.2 billion including net lending, broken down as K105.5 billion recurrent expenditures, and K14.7 billion development budget expenditures.

In general, according to the report, recurrent expenditures have deviated tremendously in the second quarter as compared to the first quarter and attributes this to the government’s increased restraint in spending which it argues has the potential to stifle public service delivery given the availability of resources.

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