With less than a month before the close of the 2015/2016 fiscal year, there are high prospects that the Malawi Revenue Authority (MRA) may miss its revenue target for the year by close to five percent.
As it stands, statistics show that MRA has managed to collect K517.39 billion of the K542.68 billion revenue projection for the year and analysts say chances of missing the target remain high.
In the month of May alone, MRA missed its target 12 percent, collecting K44.86 billion of the projected K51.23 billion.
“The performance mirrors the economic performance during the year under review where most of the corporates struggled to make profits,” says MRA in its Revenue Performance Report for the month of May.
In the month under review, a total of K19.89 billion was collected in income and profit taxes which is 20 percent less than the initial estimate of K24.96 billion
The category of Pay as You Earn registered a total of K13.60 billion against a monthly target of K18.24 billion.
MRA says the hard economic conditions experienced during the year exerted pressure on companies which had to struggle to make profits.
“Most of the corporates who published their audited accounts in the papers are depicting reduced profits as compared to the previous year, which in turn, is manifested in low revenue collection figures under the Provisional and Company Assessment taxes,” said MRA in the statement.
In an interview last week, a tax expert, Emmanuel Kaluluma, warned that the trend may spread to the coming year unless radical measures are adopted by MRA to broaden the tax base to include other eligible tax payers into the tax net.
According to Kaluluma, funding the 2016/17 national budget would therefore, require more radical measures from the Treasury as well as MRA.
“What comes to my mind is the compliance issue; if every one of us was paying their correct tax liability, government could be able to realise the revenue it is looking for,” he said.-The Daily Times