Link and Eagle Tax Consultancy joins MRA in a fight to curb loss of tariff revenue

Link and Eagle Tax Consultancy has joined the Malawi Revenue Authority (MRA) in helping government curb the problem of loss of tariff revenue through mistakes made during clearing of goods.

Payment of collect amount

The Consultancy is doing this by conducting trainings for clearing agent’s staff on tariff classification.

According to Link and Eagle Consultancy Managing Director, Lexson Kachala, the training is the first of its kind to be taught specifically as a module and by a private company.

“In the past, tariff classification training was incorporated in the whole course of customs clearing agents taught by the Malawi Revenue Authority,” he told Mana Thursday.

He said the training, which involves clearing agents; importers and manufacturers will help in such a way that charging of tariff will be done with expertise.

Kachala said due to lack of training, clearing agents more often dodge declarations when the tariffs that they quote are actually wrong and this often brings about loss of revenue to the government or the importers.

“We decided to start with classification class because of the many queries that are raised by MRA for wrong tariff classification and also because of the many benefits that accrue for correct tariff classification.

“We all know that government depends on MRA for its revenues and customs duty form a big chunk of this revenue therefore correct tariff classification will lead to correct revenue collection by government,” he commented.

The Managing Director went on to say that the training would bring about other positives like the payment of correct amount of duty by importers, collection of correct revenue statistics by MRA and government, presence of knowledgeable and efficient staff in clearing agents companies and saving of fines paid by importers and clearing agents for wrong classification.

He said importers would be able to understand why a certain amount has to be paid on their goods and that MRA will not spend much time on declarations because of the efficiency of clearing agents.

Commenting on how much government is losing due to wrong tariff classification, Kachala said there is no exact figure but the fact is that there is a lot of revenue being lost.

“It is very difficult to know the exact amount because clearing of goods is done throughout the country but I can assure you that through wrong tariff classification, government is losing money and this is evidenced by post clearance auditing that is carried out.

“Sometimes the auditors come up with figures amounting to MK300 Million and at times the figures reach MK400 Million and this just shows that government is not collecting the right amount of revenue,” he said.

Central East African Railways (CEAR) Procurement Manager, Wellings Moffat, said his company is losing a lot through wrong tariff classification and so he decided to attend the training.

He said he wants to understand tariff classification so that he can ably challenge the clearing agents when they are putting up wrong amount which so far has cost CEAR a lot.

“CEAR as a company loses almost 20 to 30 percent of its revenue due to wrong tariff classification and because we are not aware of how the tariffs are charged, it is difficult for us to know when we are being cheated and charged more than we deserve.

“We need to know which goods to pay surtax and duty for and which goods are supposed to be exempted otherwise we’ll keep losing money,”Moffat said.

One of the people from clearing agents companies, Innocencia Matchado, who works as an Imports Controller at Glens Malawi Limited, said the training is very beneficial.

She said the training will help her to be able to clear goods properly because at first she was doing her job without proper knowledge on tariff classification.

“We were only using invoices to charge tariffs but we will now be able to classify goods properly and attach a correct tariff heading to them. Now we know the dos and don’ts,” Matchado said.

She said she faces many challenges as a clearing agent because they receive a lot of queries from MRA pertaining to wrong tariff classification and this usually leads to paying of fines hence loss of money.

Link and Eagle Tax Consultancy has arranged more trainings in all the regions of the country in terms of tariff classification, valuation, and rules of origin. These trainings are to be beneficial to clearing agents, manufacturers, importers, cross border business men and women and all that may need such information.

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