MRA Casts Wide Net for SMEs
According to the World Bank, the informal sector accounts for approximately 90% of Malawi's GDP, with the formal sector making up the remaining 10%.
MZUZU, Malawi - The Malawi Revenue Authority (MRA), the country's tax collection agency, is targeting 1.6 million SMEs in its new tax drag net as one approach to level the playing field for all businesses to pay their fair share of taxes, writes Collins Mtika.
However, according to Manager, Block Management, System Hlupekile Msyali, MRA has only captured 5,455 SMEs totalling MK40.1 billion so far in revenues for the government.
Block Management System is a taxpayer outreach scheme that physically identifies and maps taxpayers and breaks them down into manageable blocks to allow MRA to visit them in person to educate and encourage tax compliance.
"We have no specific target at the moment but we would want more SMEs to comply," Msyali said.
Msyali said this during her presentation at a Monday two-day media training for Journalists at Sun Bird Mzuzu Hotel.
According to the World Bank, the informal sector accounts for approximately 90% of Malawi's GDP, with the formal sector making up the remaining 10%.
During the official opening of the training, Malawi Revenue Authority Manager, Marketing Communications Wilma Chalulu stated that, despite the challenges that the economy is facing, MRA is confident that the targeted revenue collection performance for the rest of the year will be met.
"We are honoured that in the first seven months of the fiscal year, we had numerous compliant taxpayers who paid their tax liabilities on time and in full. It is, therefore, with great humility that MRA sincerely expresses its heartfelt gratitude and appreciation to all taxpayers who always voluntarily come forward to pay their taxes," Chalulu said.
According to a 2014 FinScope survey, the micro, small, and medium enterprise sector, in which 91% of enterprises operate unregistered, generates at least MWK73 trillion in yearly sales and employs more people than the formal sector.
"We want to bring more SMEs into the tax net," Msyali said.