Despite employing various strategies to widen their tax base, public tax collector Malawi Revenue Authority (MRA) still missed its target for the 2015/16 financial year which ended on June 30.
MRA missed its target by about K24 billion ($33.3 million) after collecting K573.472 billion ($795.4 million) instead of K597.003 billion ($828 020 804).
In a circular number 7/16 dated July 8 2016 to all members of staff on salary adjustments, MRA commissioner general Tom Gray Malata attributed the failure to the challenging economic environment.
“It is, however, understood that the economic environment was quite challenging,” he said while congratulating his employees for their efforts.
The circular further states that at their June 30 2016 meeting, board members suspended staff salary adjustments, which are usually made in July until government makes clarifications on its directive.
In its circular issued on June 14 2016, government shelved proposed salary increments for employees of all statutory corporations due to the country’s poor economic situation.
But MRA told its employees that the board resolved to pend its decision on the salary adjustments “until clarifications on the circular have been sought and output from the recent market data is published.”
Malata has since pleaded with the employees to appreciate the circumstances and wait for the clarification until another communication is made.
Government, through a letter reference number C1/01/08/02 dated June 14, 2016, said after analysing the 2016 Performance Managements Plans and Budgets (PMPBs) for parastatals it was noted that almost all of them proposed salary adjustments averaging 20 percent.
“However, I wish to bring to your attention that the prevailing economic environment in the country may not accommodate the proposed adjustments,” said government in the circular.
Malata was reportedly abroad when contacted yesterday, but economics professor Ben Kaluwa, commenting on the missing of target said the development meant that the economy was “stressed”.
He said: “That means there are quite poor practices for economic growth for the formal sector and people have reached their limit on tax compliance and payment. And that calls for government to grow the economy by bringing in tax incentives.”