MRA optimistic amid forex crisis, other risks
Malawi Revenue Authority (MRA) has collected K393.79 billion in tax revenue in the second quarter of this fiscal year against its target of K386.58 billion despite challenges that negatively affected revenue collection.
Briefing journalists in Blantyre yesterday, MRA commissioner general John Biziwick said at K7.21 billion above target, the second quarter revenue performance was buoyed by provisional taxes such as income tax owing to the positive performance of financial and telecoms firms.
He said revenue collection in some tax lines was, however, partly affected by the continued effects of forex shortages which affected importation of some goods thus affecting duty.
Said Biziwick: “Reduced importation of goods and services has resulted in reduced consumption thus affecting revenue performance in some lines.
“However, revisions of pay as you earn [Paye] bracket and salary increments in some companies, increased enforcement through the block management system [BMS], commencement of advance income tax and an increase in value of duty purposes, helped improve tax collection during the year under review.”
Cumulatively, the revenue body has in the first half of this fiscal year collected K748.89 against its target of K742.22 billion.
Data shows that in April, June, July and August 2022, MRA beat its target while in May and September, the public tax collector missed its target.
In the second quarter, data shows that Paye, provisional tax , withholding tax, local excise, non-resident tax, penalties, dividend tax over performed collecting K89 million, K39 million, K38 million, K15 million K8 million, K1 million and K9 million in that order.
Tax lines such as company assessment, domestic value-added t a x ( VAT ) , fringe benef it, presumptive tax and carbon tax underperformed collecting K5.7 million, K62 million, K3 million, K3 million and K283 million, respectively.
Under BMS, which brings informal traders and small and medium enterprises into the tax net, MRA registered 458 new taxpayers between April and September, collecting K6.96 billion.
Meanwhile, the tax collector is targeting to collect K396.43 billion in the third quarter which represents a 24.33 percent increase from K318.85 billion collected during a similar period last year.
While indicating the projection faces risks emanating from the forex shortages, Biziwick he was still upbeat on achieving the feat.
He said: “We are upbeat that come the third quarter and second half of the year, we should be able to beat the target. We believe this is achievable however it hinges on the availability of foreign exchange and our hope is that the Ministry of Finance will continue working towards ensuring that this is done.”
EK Tax Consultants Tax senior tax consultant expert Emmanuel Kaluluma recently observed that there is still room for improved revenue collection if corruption was thoroughly dealt with.
“They need to get rid of inefficiencies and increase taxpayer education. It is also fair to assume that employees have had pay rise which results in more tax,” he said.
In the 2022/23 fiscal year, MRA projects to collect K1.52 trillion, an 18 percent increase from the previous year.
