MRA’s 2022-2023 revenue collection at K1.539 trillion against target of K1.538 trillion

Malawi Revenue Authority (MRA) collected K1.539 trillion in the 2022-2023 fiscal year against the target of K1.538 trillion — at a performance of 100.1% and a growth of 22%.

This was announced by MRA Commissioner General, John Biziwick in Mangochi during an interface with Association of Business Journalists (ABJ), adding that the revenue performance for the last quarter of 2022-2023 was K398.33 billion from target of K388.05 billion with a surplus of K10.88 billion — at a performance of 103%.

In January, MRA collected K161.68 billion at a surplus of K16.68 billion, February at K112.45 billion at deficit of K1.36 billion and another deficit of K3.77 billion in March after collecting K124.84 billion.

Biziwick attributed the positive factors in the performance to, among others, “changes in tax policy; increased enforcement (debt collection, customs patrols, use of inland examination centres, tax investigations); increased engagements with taxpayers; client relationship management and the increase in the value for duty purposes due to devaluation”.

He also reported non-payment of arrears by some government Ministries, Departments and Agencies (MDAs) — without disclosing the actual culprits — as one of the factors that negatively impacted tax performance amounting to K9.8 billion that affected withholding tax, pay as you earn (PAYE) and value added tax (VAT).

Technical smuggling and abuse of CPCs also affected import duty, import excise and import VAT while most companies whose accounting year ends in March posted losses and could not pay expected CIT.

Intermittent power supply impacted local production hence low production and that some dividends declared by some financial institutions were not paid in the last quarter of the fiscal year as well as disruptions of operations at some border stations caused by Cyclone Freddy

Acute forex shortages also adversely affected collection of import duty, import excise, import VAT, advanced income tax, domestic VAT, local excise and CIT.

The Commissioner General also committed that the target for 2023-2024 fiscal year is K2.111 trillion with additional K571.39 billion expected to be collected at a growth of 37%.

To widen the tax base, MRA targets to improve collection of rental income; commence collection of royalties from mining companies; to commence collection of PAYE from Malawians working in embassies and foreign missions; extend block management systems to other towns; implement tax stamps on selected products such as beer, wines, bottled water, spirits — and extend advance income tax to exports.

To improve compliance, there will be withholding tax of 1% on agricultural produce; requirement for exports of all non-traditional agricultural produce to be exported from a customs controlled warehouses; introduction of specific tax on second hand vehicles and improve interagency collaboration on enforcement activities in fighting smuggling and other tax & financial crimes.

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