The tax collecting body -Malawi Revenue Authority MRA continued beating the record in its monthly collections and in December it surpassed the target by 15%.
According to its December performance figures, the body collected 29.38 billion kwacha, 15 percent above the projection at 36.41 billion kwacha.
Cumulatively, revenue performance has been impressive in the first half of the 2013/14 fiscal year whereby a total of MK185.63 billion was collected, more than 160 65 projection.
This was again due to good performance on Pay as You Earn Tax, Withholding tax and Value Added Tax.
Economists have recently condemned this performance as penalizing the locals as ordinary people taxes are over performing comparing to corporate and taxes meant for those in business.
This is the full performance;
Income and Profits: A total of MK11.79 billion was collected on account of strong performance in all the tax lines under this category except Corporate and Fringe Benefits taxes.
Pay As You Earn (PAYE): At MK8.08 billion, PAYE over-performed its monthly projection by 36 percent and outpaced the November 2013 collection by 17 percent on account of good economic performance, which led to increases in wages and salaries and, in some cases, employment.
Fringe Benefit and Non-Resident Tax: A total of MK537.06 million was collected from Fringe Benefit and Non-Resident taxes, about 49 percent above the monthly projection. This resulted from strong performance in Non-Resident tax, which benefited, in part, from an increase in the kwacha value of non-resident workers’ wages and salaries due to continued exchange rate depreciation.
Corporate Tax: Corporate tax underperformed its monthly projection by 38 percent during the month under review. Only a few payments fall due in December, and most taxpayers prefer to settle their obligations before December mainly because December is considered a short month due to the holidays. Withholding tax, on the other hand, over-performed its monthly target by 13 percent owing to the growth in wholesale and retail trade in response to demands of the festive season.
Goods and Services Taxes: Apart from local Excise, all taxes on goods and services exceeded their respective targets during the month under review. At MK13.71 billion, taxes on goods and services collectively registered a surplus of 13 percent above the monthly target.
VAT: VAT collection during December 2013 amounted to MK10.47 billion, representing an excess of 19 percent above the monthly target. Domestic VAT, on the other hand, benefited from increased capacity utilization thereby leading to a 6 percent over-performance on its monthly target.
Excise Tax: At MK3.24 billion, Excise tax under-performed its target for December 2013 by 3 percent. Local excise registered a surplus of 6 percent above its target, on account of improved production of excisable goods. Import excise under-performed its monthly target by 7 percent.
Import Duty: A total of MK3.79 billion was collected in import duty, about 1 percent below its projection for the month. The decrease emanated from continued importation of non-dutiable agriculture-related items such as fertiliser.
Other Taxes: Overall, other taxes registered a deficit of 84 percent over their monthly target.
