By George Lumwira
Financial analysts fear the second wave of the Corona Virus will affect budget implementation as prolonged revenue challenges are likely to raise deficit and reduce total production.
In the current national budget, government set revenues at K1.152 trillion while it planned to spend K2 trillion, but during the past months, the Revenue Authority has failed to meet its average monthly target of K150 billion.
Now that the second wave of the Covid-19 is hitting hard, there are doubts that the revenue situation would improve during the first half of the 2021 fiscal year, hence widening the financing gap, initially estimated at K700 billion.
In an interview with Capital FM, Chief Executive Officer of the Institute of Chartered Accountants in Malawi (ICAM) Francis Gondwe feared of struggles in budget fundamentals such as economic growth, job creation, economic empowerment and infrastructure development.
Gondwe has since advised authorities to minimise expenditure, extend the Voluntary Compliance Window towards broadening tax among others.
“We therefore recommend that government should extend the Voluntary Compliance Window to 31st December 2021, Prioritise/minimise expenditure, Fast track introduction of Domestic Resource Mobilisation Strategy – for broadening the tax base, improving tax compliance and strengthening institutional capacity for both the Treasury and Malawi Revenue Authority and make public the COVID-19 National Response Recovery Plan. Involve the private sector,” Gondwe said.
Meanwhile, an eminent economic Professor Ben Kalua said the situation will be even tougher for Malawi, because of her predominantly importing status.