Despite the tough economic environment which has paralyzed businesses in the country, the Malawi Revenue Authority (MRA) says it is is confident of collecting 2.13 trillion kwacha in tax revenues in the 2023/24 financial year.
When presenting the national budget on 2nd March, this year, the then Malawi’s Minister of Finance Sosten Gwengwe, announced that Malawi Revenue Authority (MRA) has been tasked to collect K2.13 trillion in tax revenues for the 2023/2024 financial year.
Speaking during the opening ceremony of a two-day media training at the Institute Of Tax Administration (ITA), in Blantyre on Wednesday, 29th November, 2023, MRA Head of Corporate Affairs Steven Kapoloma, said the authority is very much optimistic to meet the given tax revenue collection target.
Kapoloma said the fact that the first six months of the fiscal year have been very productive for MRA as they have achieved unprecedented revenue collection in comparison with the previous year which gives them courage that they may do better in the entire financial year regardless of the current economic hardships.
“Although there are challenges that the economy is encountering, the Authority is highly optimistic that the targeted revenue collection performance for the rest of the year will be met. This will require concerted efforts from all of us and that includes you colleagues in the media because you are very critical in shaping the mind-set change that is required to achieve the Tax Compliance levels that will drive the development of this country,” explained Kapoloma.
He further said the confidence in meeting the K2.13 trillion target is because as an Authority they have introduced several initiatives of which some have already been implemented which he said is giving them hopes of sustainable growth in revenue collection.
He gave an example of the Block Management System (BMS) which he indicated that since its launch in 2021, 5,455 new businesses have been registered into the formal tax compliance category, thereby contributing to growth of tax revenue collection after gradually opening of special BMS offices in Blantyre Lilongwe and Mzuzu.
He also mentioned their flagship initiative Msonkho Online which he said has seen automation of Domestic Tax processes and procedures, leading to improvements in management of taxpayer compliance in terms of registration, tax filing and filing accuracy including tax payments.
Apart from that, Kapoloma indicated that the Tax Stamps which MRA intend to introduce some more products, will not only help in growth of tax collection but also root out smuggled, fake and hazardous products so that only legitimate products should be on the Malawi market.
He was, however, so quick to denounce the public outcry that introduction of Tax Stamps will increase production cost for various products, claiming it is not a new tax.
“There is a misconception that Tax Stamp is a tax, no, it’s not a tax. This is a tool that we are using to make sure that each and every product that is excisable is able to pay the much-needed tax. We already have Tax Stamps in Malawi, this is not a new thing as all cigarettes that are traded in the country do have a tax stamp.
“The cost of the stamp is five kwacha and we do not believe that it will add production cost. In countries where this is operating which include: Morocco, Ghana, Tazania and many others, cost has not been an issue on the table,” he added.
While indicating that products without stamps will be confiscated and destroyed, Kapoloma revealed that some of the targeted products include; Bottled Water (Pure and Flavoured), Carbonated soft drinks, Maheu, Energy drinks, Malt beer, Wines, Opaque beer, Spirits/ Whiskies, Cigarettes, Lotion, Glycerin and many others.
The Head of Corporate Affairs continued by revealing that the Authority is currently finding ways to deal with noncompliance of the Value Added Tax (VAT) which he indicated is being shunned by some traders who choose not to use the Electronic Fiscal Device (EFD) machine to evade the tax but said the more advanced technology will put a stop to the malpractice.
He further mentioned that the Authority has brought in a programme called “MRA4Change” which is there to ensure that taxpayers get standardized service on time and every MRA employee has been groomed for nearly two years on how best to achieve this aim.
Meanwhile, MRA says it is committed to ensure that all tax knowledge and skills are shared with members of the press to advance capacity and ensure effective utilization across the news gathering chain.