Malawi President Joyce Banda has adopted the proposal of Finance Minister Ken Lipenga to establish an independent investigation on revelations that the country’s tax collector had illegal loans to commercial banks to give the impression that the Zero Deficit Budget was on track.
Lipenga admitted that Malawi Revenue Authority (MRA) borrowed up to K30 billion from commercial banks to show on its accounts as collected revenue in order to show that the infamous Zero Deficit Budget was a miracle.
There have been calls for the Finance Minister to resign. He has refused, saying he will only resign if the findings of a probe implicate him.
During a news conference held on Wednesday at Mtunthama State Lodge in Lilongwe, President Banda said she has instituted a three-member cabinet committee to establish the truth about the saga.
“We want to know the truth,” said President Banda.
She disclosed that the committee is headed by State Vice President Khumbo Kachali with Water development Richie Muheya and defence minister Ken Kandodo as members.
Ironically, Kandodo was the first one who presented the Zero-Deficit Budget, the brainchild of late president Bingu wa Mutharika and was designed to use local resources to fund important budgets in the face of withdrawal of aid by donors over macro-economic and governance concerns
President Banda has promised that the committee will report its findings within one week.
The President said the committee has been tasked to establish whether Finance Minister Lipenga was “lied to, misled or was aware about the transaction.”
Civil society activist Billy Mayaya said President Banda should not have allowed w Lipenga and Muhara to remain in their positions while investigations are taking place.
“These two may impede the so called probe. Otherwise it may be perceived as mere whitewashing,” he pointed out.
Meanwhile, it has been revealed that Ministry of Finance authorized the tax collector to borrow K7 billion only but MRA borrowed K14.3b from six commercial banks.
In a letter -now in public domain – to MRA reference number CRD6331, dated December 30, 2011, Director of budgeting in the ministry of finance Dr. Dalitso Kabambe authorized MRA Commissioner General Lloyd Muhara to borrow MK7 billion from commercial banks.
Lipenga has insisted that that he was not aware of the developments as they were done behind his back.
When Balaka South Member of Parliament George Nnensa blew the whistle in Parliament in February this year that MRA had borrowed money to doctor its figures of revenue collection and that he had evidence, both Lipenga and MRA director general Lloyd Muhara disputed the claim separately.
Economic Empowerment Action Group (EEAG) has said it will take a court action against finance minister and MRA top officials if they will not voluntarily step down from office.
EEAG President Louis Chiwalo said all persons involved in the matter should resign forthwith if they want to save their integrity.
In another development, Society of Accountants in Malawi (Socam) chief executive officer Daniel Dunga has revealed that the revenue collecting body has not been audited for the past 10 years.
“We understand that for the past 10 years they have never been audited by anyone, even the auditor general. There is no country that can move forward like that. From the current figure, let the auditor general or some other independent expert work on the figures and give the country an independent opinion of what happened, so that business confidence can return to the country,” said Dunga in Blantyre during the 2012/13 pre-budget consultations which was presided over by Lipenga.
National Audit Office (NAO) confirmed through its communications officer Thomas Chafunya that MRA has not been audited for some time now.
MRA public relations officer Steve Kapoloma said they are audited by KPMG and that previously they hired Deloitte and Touche as auditors.Follow and Subscribe Nyasa TV :