Tax revenue totals K360 billion

The Malawi Revenue Authority (MRA) has cumulatively for 11 months up to May collected over K360 billion to feed into the national budget, about four percent above projection.

According to the 2013/14 budget statement, tax revenues were projected at K328.1 billion while non-tax revenues were estimated at K35 billion.

With heavy reliance on aid, domestic revenues were projected at K363.1 billion, representing 60 percent of total revenue and grants, while K240.3 billion are donor grants.

But the country’s main donors froze aid in November last year due to Cashgate.

Notwithstanding the aid freeze, the 2013/14 budget projected total revenues up to K603.4 billion while domestic revenues were projected at K363.1 billion.

However, MRA has been beating its projections almost every month.

According to the May 2014 revenue outturn published last week, the tax authority collected a total of K30.84 billion in May 2014, five percent over the month’s projection.

However, the month’s collection was 27 percent below the previous month’s level of K42.24 billion apparently due to the payment schedules of some taxes including corporate tax.

According to the report, in May MRA collected K728 million compared to K2.9 billion target for the month.

Regardless of the staggering fall in the tax revenue, on month to month basis, MRA has said the performance was good and has attributed the positive performance to Pay As You Earn (Paye), withholding tax, Value Added Tax (VAT), local excise and non-resident tax.

According to the available figures, in May, income and profits amounted to K13.18 billion, six percent above target while Paye contributed K9.21 billion to the tax line, 32 percent above target.

MRA collected K14.48 billion from goods and services—VAT and excise duty—about about seven percent above the month’s projection due to positive performance in all the taxes under this category, except import excise.

VAT raked in a total of K11.14 billion, 14 percent above projection. And MRA has explained that growth was influenced largely by increased private sector consumption spurred by incomes from sale of agricultural products.

However import excise tainted the tax line trailing its target by 19 percent with K3.34 billion against a target of K3.74 billion.