PAC faults MRA over mining royalties

Parliamentary Public Accounts Committee (PAC) on Wednesday faulted Malawi Revenue Authority (MRA) over its failure to present an action plan on how and when it would collect tax royalties from mining companies in the 2021/2022 financial year.

The development came to light on Wednesday at Parliament in Lilongwe when PAC met MRA’s controlling officers for a performance audit in the mining sector.

Namalomba: PAC faults MRA for sleeping on the job

Recently, President Lazarus Chakwera pegged the mining sector as one of the robust alternatives to foreign currency but PAC is not pleased with the fact that despite Chakwera having recently assented to a Tax Bill — which transferred the power of collecting royalties from Ministry of Mining to MRA — the latter is blank albeit two months down the new financial year.

At the beginning of the meeting, members of the Parliamentary committee, which provides an oversight function of public coffers, asked MRA officials to give a brief overview of the annual targets for the 2021/2022 financial year.

However, the controlling officers failed to give the legislators an action plan to indicate when the tax collecting body would start collecting royalties from all mining companies in the country.

Failure to give the revenue projections irked some legislators, prompting them to demand figures of royalties collected in recent years.

It then transpired that in the 2018/2019 financial year, K30 billion was collected whereas K37.7 billion was realised in the 2019/2020 fiscal year but there was a considerable drop in revenue collection in 2020/2021 as only K29.6 billion was collected.

PAC chairperson, Shadreck Namalomba expressed dismay with the incapacity showcased by MRA, saying Malawians deserve to know the annual targets because the revenue is for the benefit of every citizen.

“It is very surprising to note that MRA seems clueless, yet recently, the President assented to a Bill which gave MRA the power of collecting mining royalties, thus taking over from Ministry of Mining,” Namalomba said.

“It is unfortunate that two months down the line of the new financial year, they do not have an action plan. They could not even commit a date to tell us when they will be ready to start collecting [the royalties] — which is sad because Malawians need this revenue,” he said in a separate interview.

In his response, Head of Corporate Affairs, Steve Kapoloma blamed lack of capacity as a hindering factor in revenue collection from the mining firms.

However, Kapoloma stressed that the mining sector is a priority industry, as such MRA has been setting up new strategies which would help expedite revenue collection.

“One way of doing this is making sure that we have strengthened our audit team. We also have a newly trained dedicated team special for the mining sector.

“Some of the staff have been trained up to the level of post graduate in mining. We believe this will help us collect more income from the industry,” Kapoloma explained.

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