The MRA director of policy, planning and research Waziona Ligomeka, outlined that broadening the country’s tax base by bringing the informal sector into the formal tax net is not a realistic plan.
Ligomeka outlined the above during the Economics Association of Malawi (Ecama) Annual Lakeshore Conference, through a presentation titled Tax and the Pandemic: Will Malawi Raise the Revenues it Needs?
Among other problems, Ligomeka, noted that amidst the Covid-19 pandemic, most informal sector players have seen their income shrink as they have also been hard-hit by the pandemic. “The poorest 50 to 80% of households should not be expected to pay more. They are suffering enough” he said. Ligomeka also revealed that the government is looking into reviewing the tax incentives scheme as well as improving tax administration.
In efforts to get out of debt and be self reliant, the country has imposed a 20% tax on winnings from betting and gaming. On the other hand Government has challenged the Malawi Revenue authority (MRA) to collect over K150 billion every month. The Minister of Finance Felix Mlusu made the tall order as he was visiting the Msonkho House in Blantyre. He justified the target, stating that the demands are more on the national budget, hence pressing on MRA to boost its revenue collection, to fund the respective projects on the budget.