The Democratic Progressive Party (DPP) has expressed worry over the revenue projections in the 2024/25 budget, saying the Malawi Revenue Authority (MRA) failed to collect K2.24 trillion in the last financial year and it is unreasonable to expect the MRA to collect K3.26 trillion in 2024/25 financial year.
The DPP said this in Parliament through its Spokesperson for Finance, Joseph Mwanamvekha, who was responding to the 2024/25 budget.
Mwanamvekha said the budget presents revenues that are rising astronomically but have no proper explanation.
“The DPP is worried because much of this revenue is based on an increase in tax collections by Malawi Revenue Authority (MRA) which in turn is based on the unrealistic growth projections of 3.6 percent in 2024, this growth projection is not attainable which in turn renders the MRA revenue projection unrealistic,” said Mwanamveka.
He added that in the 2023-2024 Fiscal year, revenue and grants were pegged at K2.55 trillion and were revised upwards to K3.04 trillion at midyear budget review.
However, the outturn by the end of the year is expected to be K2.99 trillion. While total revenue and grants were revised upwards, tax revenue was revised downwards from K2.247 trillion to K2.198 trillion and for that reason MRA was struggling to reach the target because of slow economic activity.
Mwanamvekha wondered whether MRA will perform better in 2024.
“It is therefore strange that, while the Minister is aware of the tax collections challenges, the Minister has pegged revenue and grants collection at K4.55 trillion in 2024-2025, budget.
“More strangely, Madam Speaker, MRA which failed to collect K2.24 trillion is being asked to collect K3.26 trillion. DPP finds this to be unrealistic and unreasonable on the part of Minister of Finance taking into consideration the proposed tax measures the Minister has outlined as part of the resource mobilization strategy,” he said.
Mwanamvekha indicated that the revenue collection strategy will continue to squeeze the already struggling taxpayers and MRA’s core values and basic principles of taxation such as fairness, efficiency and legitimate trade facilitation.
