Malawi Revenue Authority upbeat on K2.11 trillion target Says losing billions to evasion
The Malawi Revenue Authority (MRA) has said it remains optimistic of hitting the K2.11 trillion tax revenue target for 2023-24 financial year despite a downgrade in economic growth assumptions.
MRA Commissioner General John Bizwick said this in Mangochi on Friday during an interface with business reporters under the Association of Business Journalists (ABJ).
Finance Minister Sosten Gwengwe announced the tax revenue target on March 2 this year before Tropical Cyclone Freddy wreaked havoc.
At that time, authorities had projected that the local economy would swell by 2.7 percent.
Since then, the dynamics have changed with the Reserve Bank of Malawi now forecasting a gross domestic product growth of 1.7 percent.
But responding to questions from journalists, Bizwick said despite the fact that economic activity is projected to slow down in 2023, the tax collector remains upbeat of meeting the target.
“I am very optimistic. It’s a huge growth but there are opportunities in there which we have not taken advantage of. In my presentation, I talked about widening the tax net in terms of new initiatives.
“But also we talked about operationalising the collection of rental income tax which we haven’t done up to now,” Bizwick said.
He added that MRA is also bringing in a new valuation database to manage customs collections.
“More importantly is the issue of us reducing tax evasion and I am sure that we should be able to do that considering that last year we were able to achieve our target and even able to surpass the revised target by K1.3 billion,” Bizwick said.
Figures he presented show that in the 2022-23 financial year, MRA beat its revenue target by K1.39 billion after collecting K1.539 trillion.
During the last quarter of the year (January to March), MRA collected K398.33 billion, against a target of K388.05 billion, thereby recording a surplus of K10.88 billion.
Among other factors, Bizwick attributed the positive outturn to changes in tax policy, increased engagement with tax payers, increased enforcement and increase in the value for duty purposes in the aftermath of the 25 percent kwacha devaluation in May.
Bizwick, however, was quick to note that Malawi is losing about K100 billion each year through tax evasion.
According to Bizwick, tax evasion is partly to blame for the forex shortage that Malawi has been facing in recent times.
He said MRA is handling tax evasion-related cases of about K60 billion.
He said the commission is putting in place systems and structures towards combating the vice.
ABJ National Coordinator Vincent Khonyongwa hailed the MRA interface.
According to Khonyongwa, there is a need for journalists to appreciate various tax initiatives being implemented by authorities so that they could easily relay the message to the masses.
