BY WATIPASO MZUNGU JNR
In every constitutionally-mandated state, government bears responsibility for providing its citizens with social services such as healthcare, schools and good road network, just to mention.
But government, as a body of people that sets and administers public policy, and exercises executive, political, and sovereign power through customs, institutions, and laws within a state, also relies on citizens for revenues for executing such development activities.
In Malawi, Malawi Revenue Authority (MRA) is an agency that is mandated to assess, collect and account for tax revenues on behalf of government.
MRA was established by an Act of Parliament in 1998 and was launched in February 2000. It was formed to improve on the functions previously carried out by Departments of Customs and Excise, and Income Tax in the Ministry of Finance.
The Authority operates as a government tax administration agency under the Ministry of Finance.
The money that the body collects goes to government for implementation of various socio-economic development projects such as the construction of roads and bridges, schools, health facilities and provision of social services like national security, provision of salaries for civil servants including the police, the army, judges, doctors, nurses and teachers.
The MRA is overseen by a Board of Directors and headed by a Commissioner General to provide leadership, strategic direction and control. In pursuance of these duties and to accomplish the mandate of MRA, functional departments and divisions are in place.
MRA has two revenue divisions of Customs and Excise and Domestic Tax Divisions. It also has supporting divisions and departments namely Finance, Administration, Legal, Information &Technology, Tax Investigations, Policy Planning & Research, Internal Audit, Security and Public Relations & Taxpayer Education.
The Customs and Excise Division administers and enforces the Customs and Excise Act. The division collects Import and Excise duty and Import VAT, trade statistics, protects the community from entry and exit of prohibited goods and facilitates trade.
The Domestic Tax Division administers the Taxation and VAT Acts. The Division collects direct Income Taxes from individuals and corporations. These are in form of Pay As You Earn (PAYE), Provisional Tax, Fringe Benefit Tax and Withholding Tax. The division also collects domestic VAT and domestic excise.
MRA has three regional offices in Blantyre Lilongwe and Mzuzu, it has 32 offices spread across the country from Nsanje to Chitipa.
One of the country’s renowned economists and human rights campaigner, Mavuto Bamusi, applauds the tax collector for performing exceedingly well in the last 10 years by, among other things, beating government targets in tax collection.
Bamusi also praises the tax agency for its restructuring processes it has taken in trying to provide better services to the citizens of this country.
“For the past 10 years, MRA has been beating targets by K2 billion; and obviously this is very good news. On the other hand, MRA has improved in terms of its approach to collecting revenues from the public,” says the economist-cum-human rights activist.
“As responsible citizens, we need to encourage it by being compliant,” he adds
But Bamusi thinks MRA has not done much in terms of righting its image to the public. According to him, the body works more of a “bully with a stick in the arm ready to crack” than a professional institution.
“Again, the general public sometimes would be made to think that some people are planted at MRA as political spies. So the institution would do itself a service it endeavors to correct this public perception,” explains Bamusi adding “MRA officials should also stop practicing corruption at crossborder posts.”
Another human rights activist Undule Mwakasungula believes MRA has fared well in revenue collection for the last 10 years.
Mwakasungula, however, faults the tax collector for denying Malawians (taxpayers) information on how much revenue MRA collects and how the revenue is utilized.
“It’s important that taxpayers are aware of how much MRA collects and how it utilizes the same. This is in spirit of achieving transparency and accountability,” he says.
Mwakasungula further notes shortfalls in deterring and interdicting cross border criminal activities, inadequate financial resources, facilities, infrastructure and untrained staff, as some of the challenges currently bringing MRA down.
“MRA should also strive more to meet their core values in terms of enhancing professionalism, equity and fairness, integrity and trust, efficiency and accountability,” explains Mwakasungula.
In conclusion, both human rights campaigners recommend that MRA should continuously institute reforms which will ensure improved efficiency and effectiveness so as to increase revenue collection. These reforms must also aim at promoting voluntary tax compliance to maximize revenue collection and decrease the cost of collecting revenue.
“MRA needs to embrace democracy in its tax collection work. MRA should stop being dictatorial. Tax-payers should feel consulted on new tax reforms. But Malawians, too, should understand their obligation to pay tax; they don’t have to be pushed,” they recommend.
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