By Wezzie Gausi:
The Malawi Revenue Authority (MRA) has said it is engaging three ministries, departments and agencies (MDAs) on strategies aimed at increasing Value Added Tax (VAT) revenue and enhancing voluntary tax compliance.
MRA officials disclosed this in Lilongwe yesterday when they appeared before the Budget and Finance Committee of Parliament.
The officials argued that this is being done in order to access a new World Bank $80 million International Development Association (IDA) grant under the New Results- Based Financing Support to Strengthen Malawi’s Fiscal Governance.
MRA Corporate Affairs Manager Wilma Chalulu said for MRA to deliver on this mandate, it needed to know more about the tax net with other MDAs.
“In the first year, we are looking at interfacing with other stakeholders on how best to collect more revenue through VAT. We are at an advanced stage with two MDAs and the results of our interface will be made public in due course.
“As MRA, our mandate in this project is to improve the efficiency and effectiveness of resource mobilisation and allocation, budget execution and accountability to support fiscal resilience in Malawi. So for this first year, we would also like to increase returns filed electronically and paid on time for VAT and corporate tax,” Chalulu said.
Budget and Finance Committee Chairperson Gladys Ganda said if MRA performs up to standard, Malawi will be accessing a huge chunk of money from the World Bank.
“This grant has come in a different form. The country needs to show results on the agreed deliverables if the bank is to release such resources. This project is for five years and so far so good. As a committee we will continue to give our oversight role until we benefit from this grant,” Ganda said.
The new $80 million IDA grant complements the International Monetary Fund Extended Credit Facility arrangement and World Bank Development Policy Financing, both approved in late 2023.
The funds would be unlocked upon the achievement of indicators such as an increase in domestic VAT revenue, decreases in variance between approved budget and expenditure outturn, and an increase of contract data accessible by citizens.
The government recently launched the Malawi Public Finance Management Strategy (2023-28) towards attaining sound financial management and discipline in public service delivery.
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