Non–tax revenue rise brings hope—analysts

The rise in non–tax revenue in the current financial year offers hope for improved revenue collection and budget implementation, analysts have said.

The analysts’ sentiments come in the wake of Reserve Bank of Malawi (RBM) figures showing that non-tax revenue collections have picked from a subdued performance at the start of this financial year, with data showing an upward trajectory.

The figures show that non-tax revenue in the first quarter of the 2023/24 financial year increased to K24 billion as of June end from K2.8 billion at the start of this financial year.

On the other hand, non-tax revenue, which includes departmental fees, parastatal dividends, road tax, rural electrification and road levies, has been on the upward spiral, tax revenue has over the same period has been fluctuating, the data shows.

According to the data, tax revenues in the quarter amounted to K453.1 billion.

Speaking in an interview on Monday, tax expert Emmanuel Kaluluma, who is senior tax consultant at EK Tax Consultants, said the development signals improvement in revenue collection modalities.

He said: “We have a lot that needs to be achieved in this financial year and this will only be achieved if our revenue performance is according to plan.

“Our appeal is that people who are responsible for the collection should keep up the pace and where possible loopholes that promote fraud, misuse of funds and corruption be closed.”

Malawi University of Business and Applied Sciences associate professor of economics Betchani Tchereni said the goal is to see that revenues improve, as such, a lot more needs to be done to ensure revenue collection is maximized.

He said: “With a thin resource envelope, there is much we need to do in terms of revenue collection and mobilisation.

“Our budget is running on deficits and every little amount that can be obtained is welcome. Most importantly, such revenues must be put to great use. In the current financial year, the government projected tax revenue at K2.13 trillion and non-tax revenue at K114.34 billion.

Minister of Finance and Economic Affairs Sosten Gwengwe said in the 2023/24 Budget Statement the government said it has prioritised efforts to improve non-tax revenue collection through digitalisation of revenue collection, intensive monitoring initiative, and review of legislations, fees and fines.

“These initiatives shall scale up non-tax revenue collection,” he said.