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Improved tax revenue gives hope to Treasury

The Ministry of Finance says there is some ray of hope about the performance of the 2015/2016 national budget following a good start by the Malawi Revenue Authority (MRA) in meeting revenue targets for the financial year.

MRA announced last week that it had beaten the revenue target for the July 2015 – the first month of the new financial year, after it collected a total of K52.14 billion against a target of K52.04 billion.

Commenting on the development, Ministry of Finance spokesperson, Nations Msowoya, said in an interview that the positive start by MRA has given hope to Treasury about prospects of revenue collection and reduced domestic borrowing to finance the budget.

“We think it has been a good start for the new financial year. MRA performed above target, which is satisfactory and the Treasury can smile,” said Msowoya.

He also said there has been no new domestic debt accrued in the first months of the financial year and that Treasuary is currently just servicing debt arrears accumulated in the past years while targeting to significantly reduce domestic borrowing.

Asked to explain why Malawi’s domestic debt now stands at K385 billion, up from K308.7 billion reported at the end of the 2014/15 financial year, Msowoya said the figure emanates from previously agreed debts and not new borrowing for the current financial year.

A recent Reserve Bank of Malawi (RBM) Monitory Policy Committee report indicated that gross credit to private sector amounted to K308.7 billion in May this year from K298.3 billion recorded in March last year.

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