MRA explains revenue challenges, optimistic
Malawi Revenue Authority (MRA) says despite facing challenges to meet this fiscal yea’s first quarter (Q1) revenue target, it remains steadfast in its commitment to optimising collection.
Speaking in Blantyre yesterday during a media training on new 2024/25 tax measures, MRA commissioner general John Biziwick said underperformance of trade taxes and value added tax (VAT) weighed heavily on revenues, leading to a deficit of K91.62 billion in Q1 on a quarterly target of K748.11 billion.
Among others, he said shortage of foreign exchange affected import taxes and non-issuance of receipts while smuggling affected VAT revenues, a situation he said will be remedied through the introduction of tax stamps, efficiency of one-stop border posts and tax reforms.
Said Biziwick: “We are implementing strategic measures to address these challenges and enhance our efficiency.
“Looking ahead to the remaining nine months of the 2024/25 financial year which ends on March 31 2025, MRA has set an ambitious target of collecting K3.26 trillion.”
During the quarter under review, MRA collected K656.48 billion against a targeted of K748.11 billion.
However, the collection represents 41 percent nominal increase when compared to Q1 of 2023/24 financial year.
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.
Meanwhile, Bizwick has said as a tax revenue administrator, MRA’s role is to implement laws which have been made and approved in Parliament, as such, the authority is not the right target to handle grievances to do with tax reforms.
He cited the Taxation Act, VAT Act and Customs Act, which Parliament approved after Ministry of Finance and Economic Affairs tabled them.
Parliamentary Committee on Media, Information and Communications chairperson Susan Dossi said the committee relies on the media to disseminate information to the masses to avoid misinformation.
She said: “We pass the laws in Parliament, but people don’t have the information that is why we face these challenges.”
Economist Lesley Mkandawire said in an interview missing the Q1 target is a red flag and if it continues in the second quarter, it would require downward revision of the budget.
He said revenue comes from income within the economy and when the economy slows down, it is a reflection of reduced income.
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, exceeding the target by K5.933 billion.
The collection represented 42 percent revenue growth in nominal terms over the previous financial year’s collection.
