IMF faults MRA on declining revenue
The International Monetary Fund (IMF) recently faulted Malawi Revenue Authority (MRA) for the declining revenue performance, especially in the 2010/11 and 2011/12 financial years, Business News has learnt.
A four-member IMF delegation from Washington DC recently visited MRA to monitor and review recommendations made in 2007 when they carried out a diagnostic study of the authority’s operations.
The team comprised Andrew Okello, Henry Gaperi, Brian Brimble and Peter Casey, according to information sourced on MRA website. The review exercise took four weeks to complete.
The group, according to the website, commended MRA for successfully implementing a number of programmes such as the change from tax-based to functional-based organisation and the phasing out of pre-shipment inspection.
“However, the delegates were also quick to fault the authority for plummeting revenue performance, especially during financial years 2010 to 2011 and 2011 to 2012,†reads the article titled IMF Reviews MRA Operations.
A 2012 government annual economic report confirms weak fiscal performance in the 2010/11 and 2011/12 financial year.
For instance, the annual report indicates that the 2011/12 financial plan, dubbed a zero-deficit budget, was characterised by poor fiscal performance of the central government budgetary operations due to lower than expected domestic revenues collected by MRA and also on account of the absence of grants on budget support.
In the 2011/12 financial year, most of Malawi’s key donors under the Common Approach to Budget Support (Cabs) suspended budget support to Malawi, citing violation of human rights and poor governance by the late president Bingu wa Mutharika’s regime.
This resulted in most fiscal targets being off-track as both tax and non-tax revenues under-performed due to reduced economic activities stemming from shortages of inputs and raw materials, especially in the manufacturing sector.
MRA spokesperson Steve Kapoloma said on Sunday that while the IMF team expressed concern on the plummeting revenue figures in the 2010/11 and 2011/12 financial year, they overall commended MRA for its recent achievements, including its modernisation initiative.
 “They [IMF team] talked about the challenges we faced, especially last year as you know there was no forex, among others. But they have commended us for continuing with modernisation initiatives such as the EFD [electronic fiscal devices],†he said.
On current revenue performance, Kapoloma said MRA is meeting all its monthly targets.
According to information on the website, MRA Commissioner General John Biziwick assured the IMF team during the farewell dinner held at Casa Mia in Blantyre that the tax collecting body will do its best to ensure that their recommendations are implemented.
Biziwick also expressed gratitude to the IMF for the support they render to MRA.
IMF provides policy advice to many countries across the globe and has separate teams which act as chief advisers to revenue bodies such as MRA on best practices regarding revenue mobilisation and quality assurance systems.
