Malawi Revenue Authority arrests 8 businesspersons over VAT offences

The Malawi Revenue Authority (MRA) has arrested eight Value Added Tax (VAT) business operators for non-issuance of and failure to retain fiscal receipts.

The offences are contrary to Section 46 of the VAT Act (Cap. 42:01) and regulation 28 (2) of the Value Added Tax Electronic Fiscal Devices Regulations, 2015, respectively.

The arrested eight Blantyre and Lilongwe based tax payers are Weionong Ji of Jifa Supermarket. Amini Karji of A H Karji ,  Hassan Usman of Sky Electronics shop, Ms. Cecilia Nkamana of P & B Wholesalers, Ms. Sarfaraz Ismael Patel of Zeenat Beauty, MHamid Kazi of Hadid Enterprises, Emerix Anorue of CEA Enterprises and Steve Prince Storey  of  Prince and PH Trading.

“They were arrested for failing to issue and retain fiscal receipts. Processes are underway for the eight to appear in Court and if convicted, they stand to pay EFD fines ranging from a minimum of MK500,000 for non – usage of the device to MK5,000,000 for fraudulent usage  or be sentenced to imprisonment,” said Steve Kapoloma, MRA Deputy Director of Corporate Affairs.

He also MRA appealed to all consumers to demand fiscal receipts and report any alleged malpractices involving the usage of the Electronic Fiscal Devices (EFDs).

By demanding fiscal receipts or invoice, VAT operators will be forced to use the mandatory Electronic Fiscal Devices (EFDs), which were introduced to curb tax evasion by non issuance of tax invoices.

According to the Authority, some VAT operators are not using the machines as consumers just walk out of shops without demanding receipts for the items bought or services rendered by the taxpayers.

EFDs were implemented to enhance revenue collections by ensuring tax compliance of VAT Registered taxpayers through the use of the Electronic Tax Registers (ETRs).

“It is criminal not to use the Electric Fiscal Devices. We will clamp down on those that are not using the machines and the law will take its course,” he said.

Kapoloma said to ensure compliance, buyers should be demanding a tax invoice or fiscal receipt generated by the EFD as this is the only way a taxable transaction will be captured.

EFDs provide evidence of sales transactions in a “technically easy and undisputed way” as the daily sales transactions are summarized before being transmitted to MRA’s main server.

Meanwhile, the Authority is reminding all taxpayers and the business community that it is their obligation and responsibilty to come to MRA offices to settle tax liabilities by themselves.

Any delay or failure to remit taxes would result in MRA asking for the taxes due plus penalties in accordance with law, according to MRA Acting Commissioner General Roza Mbilizi.