Malawi Revenue Authority seals Mike Appeal and Gatto offices: Updated

The Malawi Revenue Authority (MRA) has sealed the offices of Mike Appel and Gatto Limited in Blantyre and Lilongwe. The car dealer owes government over K1.2 billion in unpaid taxes.

MRA has also seized a number of cars in the showroom.

“We have sealed the offices of Mike Appel and Gatto Limited in Blantyre and Lilongwe. The car dealer owes Malawians over K1.2 billion in unpaid taxes. We have also seized a number of cars in the showroom” announced MRA on its Facebook page.

A summary that MRA issued, shows that Mike Appeal and Gatto had evaded paying K495 million which made the company to accumulate over K741 million in penalty and interests. The larger accumulation is on VAT and Corporate tax as the company failed to pay over K232.7 million and K231.6 million in the two categories captured in the table below.

The taxes, according to MRA, are Non-Residence Tax K6,630,193.62–[penalty interest K1,326,038.72]; Withholding Tax K5,909,269.76 [penalty interest K1,181,853.95]); Fringe Benefit Tax K8,848,386.87 [penalty interest K1,769,677.37]; Pay As You Earn (PAYE) K3,890,586.13 [penalty interest K9,986,576.57]; DUTY K5,651,030.01 [interest penalty K1,693,809.00]; VAT K232,671,020.96 [interest penalty K417,840,114.39]; and Corporate tax K231,565,880.22 [penalty interest K307,072,489.62, all totalling to K1,236,036,927.20.

MRA Deputy Director for Corporate Affairs, Steven Kapoloma said distrait order is in line with Section 107 (3) of the Taxation Act and Section 40 (2) of the Value Added Tax (VAT) Act.

“The outstanding taxes comprise VAT at K232.6 million, Corporate Tax at K231.5 million, Customs Duty K5.6 million, Pay As You Earn (PAYE) at K3.8 million and other business taxes. This action comes about after all other efforts to have the outstanding taxes paid were duly exhausted.

“Tax evasion is a serious offence under tax laws and the Malawi Revenue Authority will always endeavour to bring to book all non-compliant taxpayers,” said Kapoloma.

Meanwhile, the Authority has said the Relationship Management (CRM) programme they rolled off in the Large Taxpayers Office (LTO) has proved to be effective as far as improving service delivery is concerned.

CRM seeks to increase voluntary compliance by making it easier for large taxpayers to comply by providing them with information and assistance.

The CRM programme in LTO involves assigning specific desk officers to a particular taxpayer to provide advisory services to enhance tax compliance and ensure that all services required by the taxpayer are speedily attended to.

These services include processing Tax Clearance Certificates (TCCs), Withholding Tax Exemption Certificates (WTECs) and attending to all enquiries by the taxpayer. Desk officers also periodically remind taxpayers on tax due dates and return submissions.

Mike Appeal and Gatto are official dealers and distributors of  General Motors car brands which include Chevrolet, GMC,  Hummer, Opel and Vauxhall. The company is also a distributor of Isuzu motor vehicles and trucks.