Treasury firm on domestic revenue
Faced with the less-than-expected revenue collection in the first-half of the 2019/20 financial year, Treasury has unveiled new measures and polices aimed at enhancing revenue collection.
During the second half of the current fiscal year, total revenue and grants have been projected at K926.9 billion out of which K802.9 billion is domestic revenue and K124.0 billion are grants.
On the other hand, total expenditure and net lending are projected at K1.06 trillion out of which K722.1 billion is recurrent expenditure and K339.3 billion is development expenditure.
Minister of Finance, Economic Planning and Development Joseph Mwanamvekha in his 2019/20 Mid-Year Budget Review Statement said that during the second half of the current fiscal year, government will focus on enhancing of domestic revenue collection to achieve set targets for smooth budget implementation.
He said among others, the Malawi Revenue Authority (MRA) has intensified its monitoring and enforcement
activities, saying the revenue collecting body will continue with its implementation of the turnaround strategies aimed at achieving efficiency and enhanced taxpayer compliance.
The minister said: “Treasury will also widen the tax base by ensuring that the taxpayer register captures active and potential tax payers, intensification of efforts to address integrity issues in MRA improvement of tax payer morale through the adoption of customer focused-approach and opening of voluntary tax compliance window where taxpayers will be allowed to settle their outstanding tax liabilities without penalties.”
According to the fiscal plan, of the mid-year domestic revenue target of K655.2 billion comprising K629.9 billion in tax revenue and K25.2 billion in non-tax revenue, K548.6 billion was collected, representing a performance of 83.7 percent.
The underperformance was seen in the tax revenue basket as out of a targeted K629.9 billion for the first-half, K525.6 billion was realised, representing a tax revenue collection performance of 83.4 percent.
But commenting on the country’s revenue collection and performance, tax analyst Misheck Msiska noted that government is failing to maximase its revenue due to inefficiencies and corruption.
Msiska, who is a partner at MM Tax Advisory Services, told Business News in an interview last week that government needs to look into the performance of non -tax revenue and come up with long lasting solutions as poor performance in this revenue line puts pressure on tax revenue targets to be fulfilled by MRA.
Speaking separately, tax expert Emmanuel Kaluluma said poor performance in revenue collection does not necessarily reflect that Treasury is not diversifying its revenue lines, rather it reflects that something is not right in the economy.
Mwanamvekha, however, said Treasury has enhanced its oversight role over revenue collecting institutions, saying all revenue collecting ministries, departments and agencies have been engaged to intensify their revenue collection efforts.
