The Asian community doing business in Mzuzu says it is excited with the implementation of Electrical Fiscal Devices (EFDs) by the Malawi Revenue Authority (MRA), arguing it will help them contribute effectively to the country’s development as far as collection of Value Added Tax (VAT) is concerned.
MRA is currently undertaking the full implementation of EFDs whose chief aim is to enhance VAT compliance through acquisition, installation and use of EFDs by VAT registered taxpayers.
Abdul Mohammed, a representative of the community, told Nyasa Times on Friday after the EFD ‘Lisiti Langa Launch’ in Mzuzu that MRA decision to start the initiative has come at the right time.
“The system will effectively boost our businesses. Firstly, people will have confidence in buying from us since we’re now issuing receipts and, secondly, it because with the system auditing becomes very easy as everything is recorded,” said Mohammed.
He called on Malawians to be patriotic enough to the country by demanding EFD machine-generated receipts from shops when they buy goods.
According to MRA deputy commissioner, Rosa Mbilidzi, over 10 000 taxpayers are now registered with the system which has brought about substantial gains in the past one year.
“We have registered over 10,000 taxpayers who have acquired and are using the EFDs. The Authority is continuing with enforcement for both acquisition and usage of the machines. We are employing several strategies to enforce compliance including surveillances, observations, and consumers’ interceptions,” said Mbilidzi.
The system is expected to boost the country’s revenue collection which supports about sixty per cent of the economy. The other forty per cent comes from donors and other development partners.
Mzuzu City Mayor, William Mkandawire, described the demanding of the receipt as an “act of patriotism.”
He said considering the turbulent economic times the country is going through, there was need that collection of revenue such as VAT was maximised.
Before EFDs were introduced in Malawi, MRA faced several challenges in the collection of VAT including non-issuance of sales receipts by traders so that the VAT collected was not remitted to government, little demand of sales receipts, and non-reporting on non-issuance of receipts by customers.
According to Mbilidzi, they observed that traders were maintaining parallel invoice books– one for their true sales and the other for declaration to MRA, suppression of sales by traders, false input VAT claims by traders so that they get VAT refunds from MRA which they did deserve.
“Traders were also charging wrong VAT rates and some were even not remitting the VAT collected,” she observed.
EFDs are operational in many African countries such as Kenya, Tanzania and Ethiopia.
“It’s a modern way of doing business. So traders and consumers must embrace it because it is here to stay,” Mbilidzi pointed out.
But during the launch which was preceded by a parade around Mzuzu City, not more than three Chinese nationals turned up despite them having a number of shops in the city.
Most of the nationals Nyasa Times spoke to refused to comment on the matter.
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