By Tikondane Vega

THYOLO-(MANA)-Malawi Population is rapidly growing and at the same time the boom population generates a significant increase in the demand for social services and public utilities.

Due to this, government is under pressure to deliver basic services to its citizens such as clean water, basic health care, power supply, schools among other important amenities.

The situation which Malawi is in applies in other several countries and in order to deal with the scenario many countries including Malawi are using integrated ICT as a tool for improving revenue collection.

Since ICT is now an important tool to support government in administering taxes and other source of revenues, Malawi through its tax collecting body Malawi Revenue Authority (MRA) has also embraced it.

In his Mid-year budget statement, Finance Minister Felix Mlusu said during the first half of the fiscal year, his Ministry had set a tax revenue target of K568.3 billion but that K548.7 billion was realized representing tax revenue collection performance of 96.5 percent.

Says Mlusu,” the impressive performance in tax collection was recorded in taxes on income and profit, and capital gains as MRA focused on enhancing compliance.

But MRA’s Head of Corporate Affairs Steven Kapoloma says the better tax collection is as a result of introduction to Msonkho online which has eased access to MRAs services saying the system provides a premier online taxpayer service where taxpayers can quickly and easily register for tax, file tax return or pay taxes via MRA website.

“The system is quick, easy, tailored and secure and it allows you to manage your tax transactions at a time that is convenient for you, either from your office, home or from anywhere in the world.

“MRA is implementing Msonkho online to enhance efficiency and effectiveness in tax compliance including tax payer service management by improving and automatic business processes in the Domestic Taxes Division,” said Kapoloma.

Kapoloma said MRA is implementing a number of modernization projects which are aimed at reforming business processes and procedures in order to maximize tax compliance and revenue collection.

He added,” Apart from Msonkho online, MRA is also implementing ASYCUDA World, Electronic Fiscal Devices (EFDs) document validation and ePayments among several modernization initiatives.

“Generally Msonkho online has various benefits as it enables taxpayers to transact real time by among others reduction of travel time, reduction of paperwork, it enhances competencies in tax administration processes among other benefits.

Local tax analyst Emmanuel Kaluluma told the media that it is time Malawi embraced digitization of its taxation regime saying digitization of the taxation regime has potential to enhance revenue collection and transparency in the payment systems because everything is automated.

“In light of the realization that ICT is becoming key in tax collection, what is important for now is Malawi to work on its infrastructure challenges, to create fallback solution when internet is affected to ensure seamless digital services,” he said.

If MRA can continue properly use ICT, it can unleash a virtuous cycle, transforming multiple economic and social activities on its way and opening up of new channels of innovation like Msonkho online which has already started bearing fruits.

Before rolling Msonkho online platform, taxpayers were providing tax compliance information online but were still required to submit hard copies of their tax returns to MRA offices but such system was described as time consuming hence pushing for digitized system.

ATAF, which is a continental body for African tax administrations which was formed in 2009 with a vision of promoting effective and efficient tax administration in order to improve the living standards of people in Africa, noted that ICTs can play a critical role in enhancing efficiency of tax administrations and boost revenue collection in developing countries.

Mary Baine Director of Tax Programmes for Ataf recently said African countries which include Malawi need to maximize domestic tax revenue aided by digital platforms.

It is therefore important to note that embracing information communication technologies like what MRA is doing can enhance national revenue collection, since the degree of efficiency of country’s tax administration can make or break the economy.

But some experts says embracing ICT alone is not enough because in the meantime Malawi faces infrastructure challenges that need to be sorted out to scale up digital payment platforms saying among others authorities should try to push down internet rates to improve its accessibility.

As of 2019, Malawi internet penetration stood at only 13.9 percent according to International Telecommunication Union (ITU) and a recent study found that the internet in Malawi is among the most expensive in the world.

This was also echoed by Freedom House report named Freedom on the Net which indicated ICt remains “Prohibitively expensive” for the majority of Malawians resulting in low internet access in the country.

Hence MRA need to work with other stakeholders if Msonkho online is to produce excellent results in as far as contribution of Malawi economy is concerned.