Malawi Revenue Authority (MRA) continues to miss targets in pay as you earn (Paye) and corporate tax lines, a situation tax experts have attributed to bad economic environment which has reduced economic activity.
MRA tax performance report for May released yesterday shows that the tax collection agency underperformed by collecting K58.67 billion against a target of K61.42 billion.
This was due to the under collections in the Paye, corporate tax and import value added tax (VAT).
According to the tax revenue outturn, corporate taxes at K2.06 billion fell short of the K22.68 billion monthly target.
Under this category, all tax lines under this fell short of their monthly target in which company assessment collected K1.06 billion against a target of K1.68 billion and withholding tax brought in K5.39 billion against a projection of K6.01 billion.
At K17.44 billion, Paye also fell short by K5.96 billion, attributed to non-remittances from some statutory corporations and government ministries.
In an earlier interview, tax expert Misheck Msiska said the underperformance in the corporate and the Paye tax lines may be a sign that the economy is either stagnant or dwindling.
He said: “Both corporate tax and Paye are taxes that have to do with business. If Paye is going down this can definitely not be non-compliance of taxpaying, but an indication that businesses are not performing well.
“If the economy is growing, the Paye and corporate tax are the two indicators from the tax front.”