Malawi Revenue Authority (MRA) has said taxes collected from the industry sector in 2019 have surpassed those collected in 2018 by 20 percent despite a mixed performance from taxpayers in the year.
In a telephone interview on Wednesday MRA Head of Corporate Affairs, Steve Kapoloma, describe the revenue performance of the industry sector in the year as a mixed bag stressing that some companies were able to grow their tax contributions while others had their contributions dwindle in the year.
“Overall, we expect that many more will do well as we proceed in this New Year because signs are there that things are turning upwards and in the right direction and we are optimistic that with the growth of these companies it will also entail that revenue will equally grow.
“We just have to conclude the analysis but preliminary results show that we have grown by 20 percent but we will be able to do a thorough analysis of the year as we begin our operations in the coming days,” Kapoloma said.
However, some major revenue contributors from the industry sector are indicating that their contributions have been on the decline in recent years.
In a separate interview Business Development, Legal and Corporate Affairs Manager of Chibuku Product Limited, Gloria Zimba, said the company has been sailing through troubled waters in recent years which has affected their tax contributions.
She said in the past three years they have moved from remitting K7 billion to the MRA in taxes to K2.5 billion annually.
This represents a 64 percent drop in tax revenues from the company.
“We have been facing a lot of competition from unregulated companies that are flooding markets with products when they do not pay taxes yet they peg their products at very cheap prices, you also know about the illegal importation of Chibuku Super from Zambia which has crippled our business by claiming at least 40 percent of our market.
“It may look simple now but the impact on the economy and the community is huge because if we continue to face this pressure we will eventually resort to shed off employees and already the K4.5 billion that we used to give MRA is substantial in our economy, we wish industry players like ourselves were protected enough to contribute significantly in taxes,” Zimba said.
A latest Malawi Business Climate Survey by the Malawi Confederation of Chambers of Commerce and Industry shows that business activities slowed down in 2019 largely attributed to the political impasse after the May 21 elections.
However business operations were also constrained by several bottlenecks including energy woes, high cost of finance, excessive government borrowing, high corruption levels and poor quality and high cost of telecommunications services.