Advertisement
Business

Domestic revenue up 51.7% in 5 years

Advertisement
John Biziwick

Domestic revenue has been on an upward spiral in the past five years, increasing by 51.7 percent between 2017 and 2021, figures from the Reserve Bank of Malawi (RBM) have shown.

Major feeders into the revenue basket include the value added tax, Pay As You Earn, excise duty and withholding tax.

A look at financial and economic indicators for the years under review reveal that domestic revenue has risen to K1.3 trillion from K873 billion in 2017, K1.02 trillion in 2018, K1.04 trillion in 2019 and K1.15 trillion in 2020.

Advertisement

In its Financial and Economic Review for 2021, the central bank attributed the trajectory to a positive performance on some tax fronts.

“…tax revenues rose by 1.6 percent to K335.9 billion contributed by 2.5 percent (K3.9 billion) rise in taxes on goods and services, 5.1 percent (K2.7 billion) rise in excise tax, 83.8 percent (K8.0 billion) rise in other revenues and 5.8 percent (K1.7 billion) rise in taxes on international trade and transactions. However, the rise was not large enough to offset the decline in foreign receipts,” the review reads.

Taxation expert Emmanuel Kaluluma said in an interview that the performance could be as a result of a number of factors, including enhanced economic activities, albeit the effects of the Covid pandemic.

Advertisement

“We could have done much better than this but corruption draws us back most of the time. As a country, we still have gaps in the system and if we can check those in efficiencies and reduce corruption further, we can sail through.

“Admittedly, people get salary increments every year; that increment, over time, should also translate to tax,” Kaluluma said.

In the 2022-23 financial year, the government estimated domestic revenues at K1.636 trillion, of which tax revenues are estimated at K1.528 trillion while other revenues have been estimated at K107.8 billion.

In a quest to enhance domestic revenue mobilisation, the Malawi Revenue Authority (MRA) launched the Block Management System (BMS), a taxpayer outreach scheme which physically identifies and maps taxpayers and breaks them down into manageable blocks to allow its officers visit clients in person to encourage tax compliance.

MRA Commissioner General John Biziwick said the authority adopted BMS to level the playing field so that every business-person pays their fair share of taxes due to the government and increase taxpayers’ understanding of their tax rights and obligations.

“BMS is not a new tax but it is an initiative that is geared towards bringing services to the taxpayers’ doorsteps. BMS will therefore greatly assist in bringing more un-registered taxpayers into the tax net and in the process enabling the government to collect more revenue for national development,” Biziwick said.

However, some experts are of the view that meeting the revenue target this year might be a far-fetched dream in the view of the current economic woes.

The Treasury has moved to implement tax and non-tax policy measures to increase domestic revenues by at least five percentage points of GDP in the five years.

Facebook Notice for EU! You need to login to view and post FB Comments!
Advertisement
Tags
Show More
Advertisement

Related Articles

Back to top button
Close

Adblock Detected

Please consider supporting us by disabling your ad blocker