Blantyre Council bosses investigated on tax evasion
Reeling from accusations of sugar coating its revenue base after failing to meet its projections, the Malawi Revenue Authority (MRA) has launched investigations on Blantyre City Council (BCC) for some tax-free payments to its top management.
A source close to the issue confided in Nyasa Times that the tax collection body has been interviewing some employees close to the issue.
The source said MRA is investigating BCC bosses who for the past six years have failed to remit taxes for their security allowances yet companies they engage do so, which is an offence.
“I can confirm that case is being pursued at BCC. We have information that bosses there have been getting the whole security allowance yet the arrangement is that they get an equivalent of what the security companies they contract out get, which is less 16.5 percent,” he said.
Those who are entitled to get security allowances include the chief executive officer at Grade M1 (K36 000/ month), all directors (Grade M2), their deputies and managers (Grade M3) get K24 000 while assistant directors at Grade M4 and all those on S1 get K12000/month.
The council has seven directors, only two deputies, 11 assistants and about 15 other senior officers (managers) who get the tax-free security allowances.
Just like fuel, communication, electricity, water, gardeners and entertainment allowances, the source revealed, management is paid the money direct into their accounts at different intervals of the month.
However, an officer at the BCC finance department said that the council’s auditors are to blame for the anomaly.
“After all, the issue of the security allowances is not even in the conditions of service. Their contracts say the council shall be providing security guards and not allowances, so it’s all about auditors’ failure to offer necessary financial advice,” she said.
According to the source, previously management used to get guards who were also being used by the council and payment for the services was being paid direct to the security companies.
“But things changed in 2005 when Mr. Alfred Chanza took over as Director of Administration and boss of security department. He convinced the then Chief Executive Sophie Kalimba that the contract guards be removed at their residences and that they start getting cash equivalent to what the companies were being paid,” disclosed the source.
“However, the crazy thing is that while the council deducts 16.5 percent tax when paying the security contractors which is remitted to MRA, management gets the whole amount,” added the source while pleading not to be identified for fear of reprisals by Chanza who of late has been firing people without disciplinary hearings or dismissal letters.
The Anti Corruption Bureau (ACB) is also investigating a number of cases at the council bordering primarily on abuse of office by some bosses.
When contacted for comment, the Public Relations Manager was reportedly out of her office conducting a meeting at BCC ginnery corner offices and despite leaving a message to call back she never did.
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