MRA collects K656bn, misses target by 12%
Malawi Revenue Authority (MRA) has missed its tax revenue collection target for this fiscal year’s first quarter (Q1) by K92 billion or 12 percent having collected K656 billion against a target of K748 billion.
MRA head of corporate affairs Steve Kapoloma confirmed in an interview on Wednesday, but fell short of providing more information on specific tax lines that have underperformed.
He could also not indicate whether they are still confident to meet the K3.2 trillion tax revenue target for this fiscal year.
However, despite missing this year’s Q1 target, the K656 billion collection represents 42 percent of what was collected in Q1 of last fiscal year.
Commenting on MRA’s performance, National Democratic Institute acting country representative Emma Gausi said it will be a tall order for MRA to meet its annual tax collection target as economic indicators do not support the envisaged 63 percent increase in tax collection outlined in the current budget.
In the previous fiscal year that ended on March 31 2024, MRA beat its target by collecting K2.186 trillion against the set target of K2.180 trillion, thereby exceeding the target by K5.933 billion.
The collection represented 42 percent revenue growth over the previous financial year’s collection.
Economist Lesley Mkandawire said the missing of the Q1 target is a red flag and if it continues in the second quarter, it would require downward revision of the planned K5.98 trillion 2024/25 National Budget.
He said revenues come from incomes within the economy and when the economy slows down, it is a reflection of reduced income.
Mkandawire said the 63 percent domestic revenue growth projection for this fiscal year was without basis when the economy is not expected to grow as earlier anticipated.
“Perhaps it could be too early to worry, but that is a sign that we should look at the expenditure side because if this continues in the second quarter, it would mean the fiscal authorities have to scale down expenditure,” he said.
Meanwhile, RBM in June revised downwards the country’s gross domestic product growth rate projection from 3.6 percent to 2.3 percent, attributing it to the effects of El Nino weather that affected agricultural output, which suffered a 17 percent decline.
In the current fiscal year, government is expected to spend close to K5.98 trillion of which revenue and grants are projected at K4.5 trillion, leaving a deficit of K1.43 trillion.
