The tax collector, Malawi Revenue of Authority (MRA) collected K52.14 billion in the month of July, beating the set target of K52.04 billion by almost K100 million.
According to a published Revenue Performance report, the July collection represents a revenue growth of 27 percent compared to the same month last fiscal year.
MRA has since attributed the positive variance largely on account of Pay As You Earn (PAYE), Fringe Benefit Tax (FBT), Import Value-Added Tax and Dividend Tax.
According to the report, MRA collected a gross figure of K30.72 billion under Income and Profits, representing a surplus of 15 percent over a projection of K26.79 billion, resulted from strong PAYE, FBT, and Non-Resident Tax.
Under PAYE, the revenue collector registered positive variance of 60 percent with a total of K17.66 billion against a target of K11.03 billion.
”PAYE has over performed by such a high margin because of June’s PAYE from government which has been collected in the month of July,” reads the report in part.
Under FBT and Non-Resident taxes, MRA collected total of K1.64 billion narrowly surpassed the monthly projection of K1.63 billion by 1 percent.
However, Corporate Tax fell short of monthly target of K9.83 billion by K925.79 million, representing a 10 percent underperformance.
According to MRA, all tax lines under this category fell short of monthly projections with the underperformance attributed to sluggish performance of the economy.
”Withholding Tax totaled K2.96 billion which was 38 percent below its target for the month. The poor performance is attributed to unfavourable business climate for agriculture as well as the liquidity challenges faced by the private sector. The tobacco market has been characterized by frequent closures due to low prices offered at Auction Market”.
On Goods and Services, a figure of K15.96 billion was recorded, representing a shortfall of 18 percent from a monthly projection of K19.47 billion while VAT underperformed by 10 percent at K12.12 billion compared to its monthly target of K13.40 billion.
”Domestic VAT, which registered a figure of K4.33 billion led to the overall deficit of VAT as it underperformed by 25 percent. The short term, the unfavourable economic conditions which led to depreciation of the Kwacha benefitted Import VAT while being unfavourable to Domestic VAT through price hikes”.
On Exercise Tax, MRA collected a total of K3.84 billion, 37 percent below the target due to a 23 percent underperformance in Import Exercise exacerbated by a 58 percent deficit in Domestic Exercise while Import Duty totalled K4.53 billion, trailing its target of K5.08 billion for the month by 11 percent.
On other taxes, a total of K920.65 million was collected, 31 percent above the expected level of the month and was propelled by impressive growth in Dividend Tax, Turnover-Tax and penalties.
The performance of Dividend Tax is attributed to more companies paid dividends after the end of their financial years.Follow and Subscribe Nyasa TV :