Malawi Revenue Authority (MRA) says there is need to consider a number of factors to establish the real impact of intermittent power outages on revenue collection.
MRA head of corporate affairs Steve Kapoloma said this in an interview on Tuesday in the context of increased power load-shedding that has affected industrial production and could potentially affect revenue for companies.
But in sharp contrast, MRA commissioner general Tom Gray Malata told members of the Budget and Finance and Public Accounts committees of Parliament in May this year that under-collection of tax can be attributed to prolonged power outages which has crippled industrial production.
He said electricity problems negatively affects production of most businesses, leading to reduction in importation of raw materials on which value-added tax (VAT) is payable.
He said then: “The [powe] outages have a negative impact on production of the industries and consequently on forecasted profits on which provisional tax is based.”
But in an interview on Tuesday, Kapoloma said it is not that simple to determine the bearing that power outages have on the collection of revenue.
“One has to look at various variables to arrive at a sound conclusion that the power problem exclusively has a significant impact. We need to look at the interplay between macro and micro economic variables to make a sound inference to the electricity problem,” he said.
In the current financial year which rolled out in July, MRA has been tasked to collect K940 billion, representing eight percent growth from the 2017/2018 revised budget.
The country continues to experience power outages as Electricity Supply Corporation of Malawi (Escom) is rationing power due to reduced generation capacity from the probable demand of 351 megawatts (MW) to 216MW.
Escom has attributed the reduction to challenges in hydroelectric generation capacity, largely due to reduce water levels in Shire River, the main source of hydropower generation.
In an earlier interview, Malawi Chambers of Commerce and Industry (MCCI) chief executive officer Chancellor Kaferapanjira described load-shedding from six hours to nine hours every day as an added cost to the business.
He complained that power outages have taken a heavy toll on the industry, leading to reduced output, revenues and profit.