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Government revenue drops in August

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Ben Kalua

Total government revenue went down in August by about 4.1 percent to K103.3 billion from K107.8 billion in the preceding month, figures from Reserve Bank of Malawi (RBM) show.

The drop in the revenue has been attributed to a 19.9 percent drop in domestic revenues following underperformances in both tax and non-tax revenues.

“Tax revenue and non-tax revenue declined by 17.9 percent and 50.6 percent to K77.1 billion and to K3.0 billion, respectively,” says RBM in its report .

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However, the report shows that foreign receipts registered a highest increase of 200.9 percent to K23.2 billion in the month under review.

The increase was on account of a receipt of K16.1 billion ($21.4 million) direct budget support from the African Development Bank to cushion Malawi from Covid-19 effects.

Meanwhile, the Treasury says it has put in place measures to increase revenue such as tax on betting wins and refined cooking oil.

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But in an interview, Professor of Economics at Chancellor College, Ben Kalua, warned on continued revenue drop in the coming month.

“Government should widen the tax base to SMEs, most of whom do not pay tax,” Kalua said.

Government expenditures also registered a decrease by 23.2 percent to K109.8 billion in August 2020.

The major expenditure cuts were observed in both recurrent and development expenditures.

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