The Malawi Revenue Authority (MRA) has said it registered a 24 percent drop in tax evasion cases in 2016 when it recorded 82 cases compared to 102 in 2015.
In an interview yesterday, MRA head of corporate affairs Steven Kapoloma said most businesses involved in tax evasion in 2016 and 2015 were in retail and wholesale sectors.
Kapoloma, however, attributed the drop to a majority of Malawians who are complying with tax laws as evidenced by the number of taxpayers filing or paying their taxes on time.
“We have a fully-fledged Tax Investigation Division whose mandate is to enhance voluntary tax compliance by combating tax fraud and fiscal evasion to the highest degree possible,” he said.
Meanwhile, a tax expert from EK Tax Consultants, Emmanuel Kaluluma, has said the development explains why MRA has been beating its revenue targets in the first half of the 2016/2017 fiscal year where it collected a cumulative total of K377.08 billion against a target of K339.15 billion.
According to Kaluluma, MRA is doing certain things that it was not doing in the past.
“People go into business to get rich and not to pay taxes so each time there is a chance that they can minimise payment of their tax, they will seize that opportunity.
“If you compare the two years, MRA was in the past missing targets, but now they are achieving targets which means something has changed and that something is not about people complying with the law, but MRA is doing certain things that they were not doing,” he said.
Kaluluma said there are a lot things that can be done to improve the country’s revenue collection like compliance, full enforcement of the law on noncomplying people and improvements on tax education.
Tax evasion is costly to the country as 80 percent of the country’s national budget is generated locally.