MANAGEMENT STUDIES DEPARTMENT

(MASTER OF BUSINESS ADMINISTRATION PROGRAM)

RESEARCH METHODS
MINI PROPOSAL

By
Vanessa Mkwate
(MBA/22/PG/070)

+265 885 151 127

veemkwate@gmail.com

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TABLE OF CONTENTS

Chapter

1. INTRODUCTION………………………………………………………………………..3

1.1
Background………………………………………………………………..3

1.2 Problem Statement……………………………………………………….3

1.3 Research Objectives……………………………………………………..3

1.4 Research
Questions……………………………………………………...4

1.5 Significance of the

study………………………………………………….4

2. LITERATURE REVIEW…………………………………………………………………5
2.1 Tax eligibility ………………………………………………………………5
2.2 The Msonkho Online System……………………………………………5
3. RESEARCH METHODOLOGY………………………………………………………..6
3.1 Research
Design…………………………………………………………….6
3.2 Location of the study……………………………………………………….7
3.3 Target population……………………………………………………………7
3.4 Sampling Methods…………………………………………………………..7
3.5 Bias in
Sampling……………………………………………………………..8
3.6 Data collection ………………………………………………………………8
3.7 Sample Size………………………………………………………………….8
3.8 Data analysis and presentation.……………………………………………
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3.9 Budget………………………………………………………………………..8

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References……………………………………………………………………………………..10

Appendix………………………………………………………………………………………..11

Chapter 1

1.1 Background

Many developing countries including Malawi, rely on taxes for their social-economic
growth. Taxes are a primary source of revenue for most governments in areas of
defense, health, welfare, and Social services. Most developed countries in the world
have well-structured modern tax systems used to raise revenue and provide quality
public goods and services. These modern tax systems have enabled tax administrations
to reach out to many taxpayers and widen the tax band. However, many developing
countries have limited capacity and are still in the paper era and only administer taxes
to a small fraction of businesses thereby milking the same category of taxpayers. The
outcome of such events is non-compliance, smuggling, resentment and poor revenue
performance. Many tax administrators in Africa rely on employment tax and
consumption tax like to raise revenue. Malawi is indifferent to these tax issues that
affects the economic growth of the country. The agency that administers taxes in
Malawi is the Malawi Revenue Authority (MRA) reporting to the Ministry of Finance
(MOF). The Malawi Revenue Authority was launched in February 2000 and formed to
improve on the functions previously carried out by Divisions of Customs and Excise,
and Income Tax in the Ministry of Finance.

1.2 Problem Statement

The Malawi Revenue Authority has initiated various reforms in recent years to create
better working relationships, increase tax compliance, and strengthen integrity. One
such reform is the Msonkho Online system which presents a modern way of carrying
out tax transactions. However, MRA still struggles with issues of non-compliance,
integrity, and resentment which ultimately affects revenue collection.

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A lot of these challenges stem from poor customer service, manual systems, corruption,
and non-standard services.

MRA implemented the Msonkho Online system to counter these challenges.

1.3 Research Objectives

The study wishes to find the following:

Main Objective

 Studying the effectiveness of the Msonkho Online System on tax compliance and
revenue collection

Specific objectives

 Assessing the adoption rate of Msonkho Online by small, medium and large
taxpayers
 Assessing the impact of Msonkho Online on tax payment and submission
 Assessing the challenges encountered by small, medium and large enterprises
when transacting on Msonkho Online.

1.4 Research Questions

This study will answer the following areas of focus:

 Is the Msonkho Online System accessible and user friendly?

 Does the system ease the submission and payment of returns?
 How is the Msonkho Online System performing?
 Do you prefer the adoption of the Msonkho Online system as opposed to the
manual systems
 Has the Msonkho Online System improved your overall tax transactions?

1.5 Significance of the study

Establishing the effectiveness of the Msonkho Online System on tax compliance and
revenue collection will lead to an increased public understanding of how the Msonkho
Online System operates, its importance and why MRA encourages it’s adoption.

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Until recently, no research has been conducted on assessing the impact of Msonkho
Online on tax compliance and revenue collection. This research will therefore provide a
foundation on understanding the Msonkho Online System as a tool for promoting tax
compliance and revenue collection.

The findings of this study will alert MRA on the challenges taxpayers encounter when
using the Msonkho Online System. The study will also inform taxpayers of their
obligations in adopting the new system as we are headed to the paperless era. The
study will further assist the Malawi Revenue Authority in improving areas of tax
compliance, transparency and taxpayer relationships which will ultimately lead to
increased revenue collection.

Through the data analysis this research will provide, future researchers may explore the
relevance of the Msonkho Online System in promoting business growth for small
taxpayers and medium taxpayers.

Chapter 2

Literature Review

This chapter reviews literature on the benefits of Msonkho Online in regards to filing
returns, tax registration and payment, as opposed to manual tax transactions. In
addition, the chapter will review theories pertaining to the subject matter of discussion
(specific objectives and research questions) as presented in chapter one.

2.1 Tax eligibility

According to Worldwide tax summarizes (2023), any person operating a business in

Malawi becomes potentially liable for tax and has to register. Any tax registration be it
for a Malawian citizen or foreigner is currently done on the Msonkho Online System.
Worldwide tax summaries emphasizes that, where eligible businesses fail to register,
the Commissioner General is mandated to proceed with the tax registration.

Currently, business taxes are handled by the Domestic Taxes Division and the main
taxes are; PAYE, Income Tax, VAT, NRT, and Domestic taxes.

2.2 Msonkho Online System

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According to the Malawi Revenue Authority [MRA] (2021), Msonkho Online is a web--
based system designed to provide a premier online taxpayer service, where you can
quickly and easily register for tax, file tax returns or make tax payments. The system is
secured, and tailored to manage taxpayer’s tax transactions at a time that is convenient.

The Nation (2021), reported that MRA rolled out the initiative with an aim of enhancing
efficiency and effectiveness in tax compliance and taxpayer service management by
improving and automating business processes in the Domestic Taxes Division. The
report established that taxpayers complained about manual systems being time-
consuming, cumbersome and tedious.

According to Public Service Reforms (2023), the Msonkho Online system has
transformed the country’s tax collection operations making obsolete weak manual
systems previously prone to fraud and corruption. Through the web-based solution, the
management of taxes such as Income Tax, Value Added Tax (VAT), Withholding Tax,
Fringe Benefit Tax (FBT), Provisional Tax, Turnover Tax (TOT), Pay as you Earn
(PAYE) can be done at the click of a button.

The report further states that implementing Msonkho Online provides the Authority an
opportunity to improve the management of taxpayer compliance in terms of registration,
filing and payments, as well as enable taxpayers meet their obligations. Through
statistics complied so far, it is evident that Msonkho Online has managed to increase
revenue collection through increased compliance.

According to Adejumo (2023), in a bid to promote tax compliance, MRA has recently
upgraded its Msonkho Online System as part of its modernization reform. The System
will enhance MRA’s image, widen the tax net, and enhance taxpayer service and
education.

Chapter 3

Methodology

This chapter presents the description of how the research will be carried out. It points
out the different types of research methodologies which will be used in this study. This

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chapter will include the design, location of study, the population, sampling methods,
sample size, data collection procedures and research instruments.

3.1 Research Design

A research design is the process used to analyze data, interpret results and
disseminate the findings. It can either be qualitative, quantitative or a mixture of both.
Our study focuses on a quantitative design hence the use of statistical methods to test
hypotheses. This is because the Malawi Revenue Authority uses quantifiable data to
establish how well it has done in a given financial year. The disadvantage of using this
design however, is that it does not provide in-depth information since quantitative data
provided by questionnaires merely describe the phenomena.

3.2 Location of the study

The location of the study is Blantyre, a city located in the southern part of Malawi with a
population of 1,031,000.

3.3 Target Population

The target population of the study are tax registered businesses under small, medium or
large categories. This is because the Msonkho Online System caters for any individual
or business willing to remit taxes at the Malawi Revenue Authority.

3.4 Sampling Methods

This research focuses on a subset of the population due to cost implications and the
workload. Therefore, the sample size engaged is enough to reflect the true events on
the ground. This study focuses on non-probability sampling, only accounting tax
registered businesses that will ultimately be selected by chance. This will erase any
traces of bias and will produce a generalized study. Non-probability sampling will also
present cheaper alternatives, convenience and no risk of non-representative samples
as with probability sampling.

The table below indicates the demographic characteristics.

Interviewees Gender Business Number of years in

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 Occupation operation
Interviewee 1 Male Sole Proprietor 5 years
Interviewee 2 Male Sole Proprietor 2 years
Interviewee 3 Female Partnership 8 years
Interviewee 4 Male Company 15 years
Interviewee 5 Female Sole proprietor 7 years

3.5 Bias in Sampling

These important biases will be taken into consideration during the sampling of this
research:

 Businesses located outside of Blantyre will not be considered

 Business not available due to reasons unknown to the researcher will be
replaced with other business options
 Businesses operating in Blantyre but not registered for any tax will be omitted.

3.6 Data Collection

The data collection instrument that will be used in this research is a questionnaire. This
is because this study is descriptive in nature. The questionnaires will be self-
administered and participants will be given ample time to answer the questions. The
data collected will be precise and mostly reflect behavioral characteristics. This is done
to understand behavioral patterns of how taxpayers are adopting the Msonkho Online
System.

3.7 Sample size

The sample size of the study is 40 participants. The participants will be a mixture of
small, medium and large taxpayers located in Blantyre Township. The sample will
enable the researcher to derive accurate results based on the thumb rule. The thumb
rule recommends that a sample of 30 participants are enough to satisfy statistical
requirements and reduce costs and time in data collection. There will be 45
questionnaires that will be issued to the participants.

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3.8 Data Analysis and Presentation

Due to the nature of the study being quantitative, the research will use the STATA tool
for data analysis and presentation. The data will be analyzed by descriptive statistics.

3.9 Budget of the research

The cost breakdown of the research is as follows:

Item Explanation Cost

Airtime This item will be used to 50,000.00
buy data and phone call
bundles to engage with the
participants
Photocopy and printing The questionnaire will be 25,000.00
administered in hard
copies and will require
printing and photocopying
Travel Fuel The study will require 150,000.00
travelling to the
participant’s business
premises
Stationary Pens, paper clips, filing 50,000.00
folders and markers
Total K 275,000.00

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REFERENCES

Adejumo, Q. (2023). Malawi Revenue Authority Upgrades Msonkho Online to Improve

Tax Compliance and Strengthen Integrity.
https://bnn.network/breaking-news/economy/malawi-revenue-authority-upgrades-
msonkho-online-to-improve-tax-compliance-and-strengthen-integrity/

The Malawi Revenue Authority. (2021). About Msonkho Online.

https://www.mra.mw/msonkhoonline/about-msonkho-online

Public Service Reforms. (2023). Msonkho Online transforms Malawi’s Tax Collection
Operations.
http://www.reforms.gov.mw/psrmu/msonko-online-transforms-malawi%E2%80%99s-
tax-collection-operations

Worldwide Tax Summaries. (2023). Malawi Corporate – Taxes on Corporate Income.

https://taxsummaries.pwc.com/malawi/corporate/taxes-on-corporate-income

The Nation. (2021). Taxpayers reaping from Msonkho Online – MRA.

https://mwnation.com/taxpayers-reaping-from-msonkho-online-mra/

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Appendix

QUESTIONNAIRE

To our dear participant,

This questionnaire has been designed with the aim of getting feedback from the
taxpayer on the use of the Msonkho Online System. It could be most appreciated if you
could spare your time to complete this questionnaire. The information provided will be
used for academic work only. Strict confidentiality is assured. Thank you.

1-Are you registered for any tax at the Malawi Revenue Authority

a. Yes
b. No

2-Is your business registered on Msonkho Online

a. Yes
b. No

3-Have you ever used the Msonkho Online system to submit or pay taxes?

a. Yes
b. No

4-Which taxes are registered on Msonkho online

a. Income Tax
b. VAT
c. PAYE
d. FBT
e. Withholding Tax

6- How would you describe Msonkho Online for your tax transactions?

a. Useful
b. Waste of time
c. Can be useful

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7-Would you recommend the use of Msonkho Online?

a. Yes
b. No

Thank you for attending this survey

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