TREASURY OUTLINES ENHANCED TAX ENFORCEMENT PLANS

In its 2019 Economic and Fiscal Policy Statement (Efps), Treasury has outlined its plans to widen the tax net and broaden the base by, among others, exploring new areas to tax, increase enforcement and monitoring compliance.

The report emphasizes that government will continue to review tax legislation, including the establishment of a Revenue Appeals Tribunal for efficient resolution of tax disputes. “Government also intends to curb tax avoidance by reviewing and renegotiating some obsolete double taxation avoidance agreements, negotiating new DTAAs with potential treaty partners and adopting measures to prevent base erosion and profit shifting [Beps].”

The Mid-Year Budget Review this year, presented by (former) Minister of Finance Goodall Gondwe, showed that corporate tax underperformed during the first half of this fiscal year. Figures show that a 20.3% drop was registered, when compared to figures from the same period in 2018. According to the presentations by the minister, Treasury amassed K479 bn, which was lower than K456.7 bn collected last year.

The presentation also noted a drop in non-tax revenues which together will the tax underperformance, will affect Malawi’s economy in the rest of the fiscal year.