Malawi Revenue Authority (MRA) has indefinitely stopped the operations of the tyre manufacturing companies on grounds that their production process does not qualify as manufacturing.
MRA has since written to the manufacturing companies, notifying them about the development.
Titled “Cancellation of the industrial rebate registration in the rubber products manufacturing industry”, the letter, which has been signed by Fredrick Mpeusa, Acting Commissioner Customs and Excise, Fredrick Mpeusa for the Commissioner General, the Authority says in accordance with the Eighth Schedule to the Customs and Excise (Tariffs) Order, it has cancelled Industrial Rebate Registration for the tyre manufacturers.
“Kindly note that the Rubber Products Manufacturing industry was established with the view of manufacturing tyres rather than repairing used tyres. The cancellation of the license therefore entails that your company will cease to operate under the Industrial Rebate Scheme; hence, you are expected to pay full duties on all imported new materials,” reads part of the letter.
“By copy of this letter, the Deputy Commissioner Customs and Excise – Business Analysis is informed of this decision and should remove the client’s taxpayers identification number (TPIN) under the Industrial Rebate Scheme in the system with immediate effect.”
MRA Head of Corporate Affairs Steven Kapoloma confirmed the development, stressing that they had noted that the companies were not doing what they applied for.
Kapoloma said instead of producing tyres, the companies have been repairing (re-treading) tyres.
“MRA investigations have established that what they are doing is not manufacturing, but repairing used tyres against the spirit in which the license was awarded,” he said.
Mr. Kathewera, a senior official at one of Malawi’s tyre manufacturers, Entyre Malawi Limited, asked for more time before commenting.
But some Malawians have expressed fear that this could lead to job losses at the affected companies.