Malawi Revenue Authority misses tax revenue target by K41bn

The Malawi Revenue Authority (MRA) has missed its half year target by MK41 billion , the authority’s chairperson has confirmed what the tax revenue outturn has shown.

The board chairperson, Eric Chapola confirmed that MRA had set to collect a target of K451.87 billion in the first six months of the 2017/2018 financial year but managed to collect MK410.87 billion, representing 91 percent.

Chapola said in the first half of the year the revenue collecting body was pushed to meet national budget demands due to lack of direct budgetary support.

He, however,  expressed optimism that they will meet the annual target come end of the financial year.

Despite falling short of K41 billion, the revenue collection is way better comparing to what was collected during the same period in the previous financial year.

During the first half of the 2016/2017 financial year the authority collected MK377.44 billion which is MK33.42 billion less than the current collection,  according to published revenue performance figures.

MRA corporate affairs deputy director Steven Kapoloma was not available to comment on the figures which is being attributed to the subdued performance to weak collections in provisional tax, domestic excise and trade taxes and the expected reduction in profits from business due to the power outages.

Malawi Confederation of Chambers of Commerce and Industry (MCCCI) president Karl Chokotho said reduced production by industries in the face of electricity outages entails reduced volumes available for sales and reduced revenue which translates into reduced tax revenue.

“Industry requires electricity for production, from SMEs [small and medium enterprises] to large factories. Some industries have deployed alternate power sources which are more expensive than electricity such as generators which increases operating costs and reduces profit and tax revenue.

“Unless there are drastic changes in the supply of electricity, we should brace for reduced tax revenue which will ultimately affect public service delivery,” he said.

Chokotho said another scenario is that when power is back, it does not mean that machines will make up for the lost time.

“Production lost during outages is production lost completely unless there is an alternative source of power being used,” he said.

The shortfall in power supply, which is currently at 90 megawatts has been attributed to the continued decrease in water levels in Lake Malawi, which feeds into Shire River, where 90 percent of hydropower is generated.

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