MRA collects K130bln in April racing towards K1.518 trillion revenue target
For the 2022-2023 fiscal year that started from April, Malawi Revenue Authority (MRA) set a target K1.518 trillion and in its first month, the Authority has already collected K130 billion.
This is against a set target of K124.57 billion the Authority had anticipated for April 2022, thereby exceeding it by K5.88 billion — a performance that translates to a nominal growth of 22.3% compared to K106.65 billion collected in April 2021.
This was disclosed by MRA’s Commissioner General, John Biziwick on Wednesday at a press briefing held at Sunbird Mount Soche Hotel where he announced revenue performance for 2021/22 fiscal year; factors that affected revenue performance; projection for 2022/2023 fiscal year; the Authority’s key initiatives for 2022/23 and modernization reform updates, amongst others.
For the 2021 fiscal year, the actual MRA set a target to collect K1,033.07 billion but only managed K959.6 billion at K73.4 billion variance — thus registering a performance rate of 92.87% and a nominal growth of 19% compared to the same period in 2020-2021.
Biziwick said factors that affected the Authority to fail to meet the set 2021/22 fiscal year target included policy change in pay as you earn (PAYE) middle bracket from 30% to 25%; lagged effects of CoVID-19 that led to reduced profits for some companies; reduced corporate income taxes and shortage of forex that negatively affected volume of imports between November 2021 to March 2022.
Others included global increase in prices for containers that led to reduced importations; delayed implementation of some tax measures — such as tax stamps, advanced income tax, presumptive tax and Tax Administration Act — and also delayed payments by some government Ministries, Agencies and Departments (MDAs).
Biziwick also announced to commit himself in continued engagement with the media, saying such interface meetings would be held every fiscal quarter for revenue performance updates.
Key initiatives for 2022-2023 include a strategy map that is set to widen the tax net; optimize resource allocation; enhance taxpayer services and education; enhance trade facilitation and to strengthen corporate image.
It is also set to increase taxpayer compliance; strengthen legal and regulatory framework; improve risk management, control and governance processes and to integrate ICT systems, amongst others.
In widening the tax net, Biziwick indicated that currently MRA has just 33,143 active taxpayers at 576 low tax office; 1,197 middle and 31,370 small with 12,266 being registered value added tax (VAT) operators.
There are over 1.14 million MSMEs in Malawi but the total tax register is just 2.5% of the MSMEs.
Other strategies to widen the tax net to optimize revenue collection include rolling out block management system in Blantyre/Limbe, Lilongwe, Mzuzu and Zomba; advanced income tax; presumptive tax and electronic tax stamps.
Biziwick said widening the tax net is important as it “promotes a fair tax system where the tax burden is widely shared among the citizens and that pressure is reduced” — which at the end of the day increases revenue for the government “to implement development projects as well as giving room for government to lower tax rates”.
In order to enhance trade facilitation, Biziwick said they will ensure timely processing of taxpayer services including the clearance and release of goods and passengers by implementing a one stop border post — of which one has already been built at Mchinji Border Post.
Follow and Subscribe Nyasa TV :
