Malawi Revenue Authority (MRA) collected K34.34 billion in March, missing projections by about three percent, blaming the underperformance of some taxes.
“The underperformance in March is on account of underperformance of domestic VAT [value-added tax], Excise taxes, trade taxes and corporate taxes which as a result contributed to the negative performance during the month,” said the tax collector.
The revenue performance report for March 2015 says MRA collected K4. 71 billion in domestic VAT, a shortfall of the K5.72 billion target.
The report points that the situation was largely influenced by big companies who claimed high amounts of input VAT resulting in dismal net payments of the surtax.
The analysis also shows that excise duties collected during the month under review were 58 percent below target largely due to a 67 percent underperformance in import excise occupied with a 38 percent in local excise.
The report further indicates that corporate taxes stood at K1.38 billion which was 27 percent below the projection for the month due to offsets.
“Requests for offsets are on the increase as we accumulate huge refund claims due to little funding of the refund account. Both company assessment and provisional taxes fell below their monthly targets while at K2.96 billion,” said the report.
Earlier this year, Economics Association Malawi (Ecama) president Henry Kachaje said the achievement of targets would require a more robust strategy that gradually increases tax base.
He, however, cautioned that it will be a challenge to raise more revenue locally considering that many businesses might not perform well in the first quarter of this year due to the negative impact of the floods on the economic performance.
On the other hand, MRA says income and profits taxes earned the institution a two percent over performance of K16.78 billion against a K116.40 billion projection on account of Pay As You Earn (Paye) and withholding tax.
According to the tax collector, Paye also recorded a good performance registering a 12 percent increase of K12. 14 billion, higher than the monthly projection which it says was largely influenced by upward salary adjustment in government, Judiciary and university staff.