MRA meets November targets
The Malawi Revenue Authority (MRA) in November failed to meet its targets in excise duties, value-added tax (VAT) and corporate tax despite beating its overall target.
According to the November 2012 tax outturn released recently, MRA failed to meet its revised target of K2.66 billion in excise duties by K591 million while in corporate tax, it only collected K635 million instead of K776 million.
MRA is also having problems in VAT as it also missed its target of K3.99 billion by K649 million.
But overall, the tax body collected K19.33 billion, beating its revised November target of K19.1 billion by K223 million.
In the month, MRA collected K7.4 billion from income and profits tax, K9.1 billion from VAT and excise duties and K2.6 billion from international trade.
Comparatively, the November tax revenue of K19.33 billion is K5.5 billion less than that of October.
Experts contended that the missed targets and the fall in the total revenue collected may be a sign that the depressing performance of the economy pegged at a 1.9 percent annualised growth rate is taking its toll on businesses and households.
It may also mean that the inflation rate pegged at 33.3 percent and bank interest rates hovering at over 36 percent is showing its effect on revenue collection.
But Economics Association of Malawi (Ecama) executive director Nelson Mkandawire in an interview said there could be a number of factors at play not only the depressed economy.
“It would be too early to attribute the decline in the total revenue collected to the poor performance of the economy. Yes, it may be due to the dismal performance of the economy, but there may be other factors, for instance, relaxed efforts by MRA officers or due to mere seasonal variations,” said Mkandawire.
But MRA public relations and communications manager Steven Kapoloma in an e-mail said they did not meet the targets in excise duties due to the removal and reduction of excise duty on some products in this year’s budget.
He said this is in line with best practice and is also in alignment to the Southern Africa Development Community (Sadc) and the Common Market for Eastern and Southern Africa (Comesa) rates.
“Some of the goods or products that had excise duty removed included blankets, cooking oil, footwear, second hand clothes, fabric, furniture, sweet biscuits and others. Excise duty was also reduced on ethanol, perfumes and cosmetics,” said Kapoloma
On VAT, he explained that taxpayers claimed more input VAT due to increased imports for the festive season and that contributed to less output VAT.
In the previous report, although the tax collector managed to beat its target by over K2.27 billion, it also failed to meet its target in excise duties by K385.6 million.
Specifically, in October MRA collected K12.3 billion from income and profits, K9.3 billion from goods and services and K3.1 billion from international trade, beating its projections in all these areas.
Cumulatively, since July, MRA has collected a total of K104.5 billion beating its total projection of K104.2 billion for the five months. By the end of this fiscal year, MRA is to collect a revised projection of K254 billion to feed into the national budget.
