Malawi businesses obtain injunction against MRA’s VAT collecting machines

Concerned business people in the country have obtained a court injunction stopping the Malawi Revenue Authority (MRA) from implementing the newly introduced Electronic Fiscal Devices (EFDs) as a collecting mechanism of Value Added Tax (VAT).

MRA introduced EFD in March which required that all VAT operators should buy EFDs from licensed distributors.

The injunction comes after  a study a conducted by one of the country’s business persons and also a civil rights campaigner Rafiq Hajat which faulted MRA for  introducing in a hurry the EFDs.

Hajat: Roll out should be delayed

Hajat: Roll out should be delayed

Hajat called upon the MRA to conduct a thorough situational analysis before embarking on the initiative.

“The MRA must delay the roll out by at least eighteen months, in order to ensure that the Electronic Fiscal Devices become a boon and not a curse for the country”, reads the study by Hajat in part.

The courts document seen by Nyasa Times indicates that business persons obtained the injunction through their Lawyer Frank Mbeta on June 27, 2014 stopping the tax collecting body from implementing the system.

These include Azizur Rahman Vali Patel (trading as Aziz’s Cash and Carry) Naseer Ahmed (trading as Food City Take Away) Imran Meman (trading as Kamlisha Enterprises), and Mansoor Ibrahim (trading as Mansoor wholesalers).

The business men argue that the MRA is implementing mandatory use of EFD despite knowledge of the many irregularities.

They say the EFDs pose a problem since operators would have to seek permission from MRA to change information that has already been registered in case a customer has decided to order fewer goods than earlier ordered.

“VAT operators also wouldn’t be allowed to operate if there is no power or electricity or the EFD network failure,” reads the document in part.

They have described the cost of the gadgets an fair and expensive for VAT operations. The cost EFD machine is $255 (MK104, 805) from the manufacture but the licensed distributors are selling at $850 (MK349, 350) representing a 333 percent increase in price.

However the MRA has begun the process of vacating the injunction. The hearing of the case began on Friday July 18, 2014 and is expected proceed on Friday July 25,2014.

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