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Government revenue still on downward spiral

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KALULUMA

Government revenue went down by 5.7 percent in April to K112.8 billion from K119.6 billion recorded in the preceding month, the Reserve Bank of Malawi (RBM) indicates in its monthly economic review.

The report has attributed the drop in the collection to a decline in domestic revenue.

“This outturn was mainly on account of domestic revenue collections that declined by 19.5 percent to K88.0 billion in April 2020. Under domestic revenue, both tax and non-tax components contributed to the reported drop in the month” reads the review in part.

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Tax revenues declined by 8.0 percent to K82.9 billion whereas non tax collections fell 73.6 percent to K5.1 billion.

Foreign receipts which contributed to the decrease in revenue collection during the first quarter of 2020 picked up by K14.5 billion to K24.8 billion which the central bank owns to grants towards the Covid-19 fight.

In an earlier interview, a taxation expert, Emmanuel Kaluluma, said domestic revenue will continue to decline until government places measures that will bring businesses, which have been interrupted by the Covid-19 pandemic, to normal.

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Government expenditure increased in April from K154.5 billion in March to K175.7 billion.

Presenting the 2020/21 national budget on Friday, the Minister of Finance Joseph Mwanamvekha expressed fears that revenue collection will continue to fall.

Revenues and grants for the 2020/2021 fiscal year are estimated at K1.372 trillion, representing 19.2 percent of GDP and a 10.1 percent decline when compared to the 2019/2020 mid-year revised estimate.

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