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Malawi Revenue Authority misses target

Malawi Revenue Authority (MRA) has missed the January revenue collection target by K5.6 billion.

The development has prompted Ministry of Finance and Economic Planning to call for a meeting with MRA to find out why it continues missing monthly revenue collection targets.

The ministry’s spokesperson, Nations Msowoya, said this on Thursday when asked to explain the position of the Treasury on the matter with the latest January collection having a deficit of K5.9 billion.

“They (MRA) are trying their best to collect as much. We will sit down with them to appreciate the challenges that make them fail to meet targets and, from there, we shall see how best to help them,” said Msowoya.

According to MRA’s January 2016 Revenue Performance Report, dated February 2, 2016, the body managed to collect K52.7 billion out of Treasury’s targeted K58.6 billion representing a 10 percent drop.

“Gross revenue collection for the month of January, 2016 is K52,798,217,437 against a Treasury target of K58,624,283,321 registering a 10 percent under-collection of K5,826,065,884 as shown in the revenue position worksheet,” reads the report signed by Revenue Accountant, Tiya Somba Banda.

The report further states that for domestic taxes, MRA failed to collect K6 billion thus registering a 12 percent under collection. For customs, the authority failed to meet target by three percent.

“Domestic Taxes under-collected by 12 percent, collecting K38,297,655,192 against a target of K44,354,600,962 where as Customs under-collected by just a 3 percent by collecting K13,870,562,246 against a target of K14,269,682,359. Cumulative gross revenue collection for the five months of the 2015/16 fiscal year is at K329,136,541,363, 3 percent below the target of K338,935,464,467,” reads the report.

It further shows that MRA also collected K139.5 million TEVET levy.

In the same period January 2015, the authority collected K46.6 billion translating into a 13 percent nominal growth by K6.1 billion. In November, MRA missed the target by 14 percent a development said to have happened for the first time in the history of the authority.

October had also a shrinking tax revenue base when the body collected K53.03 billion against the target of K55.97 billion missing its target by five percent.

Chancellor College economics professor, Ben Kaluwa, was quoted as saying the failure to meet the targets was because of unsettled arrears of government to the private sector because that depresses industry players.

Earlier this year, Economics Association of Malawi (Ecama) president Henry Kachaje observed that meeting targets would require a more robust strategy that gradually increases tax base.

The under-collection is happening when donors have stopped giving budgetary support to government due to the plundering of public resources at Capital Hill.

The donors, including European Union and the World Bank, have given government 20 conditions to fulfill before resuming budgetary support.

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