Mike Appel and Gatto accuses MRA of doctoring tax figures

Mike Appel and Gatto Limited has accused the Malawi Revenue Authority (MRA) of doctoring the amount of taxes the company is being accused of not remitting to government.

On Monday MRA sealed the company’s offices in Blantyre and Lilongwe and seized a number of cars in its showroom for failing to remit taxes amounting to K1,236,036,927.20.

However, the company through its tax-consultant, is disputing the published figures, and has since described the move by MRA to seal off its offices as unprofessional and a breach of its code of conduct.

Mike Appel and Gatto Limited’s hired tax-consultant, Emmanuel Kaluluma told the local media the figures which the tax-collector has been publishing were not true reflection of how much the company owes government.

He did not disclose how much the company owes government in unpaid taxes.

“An agreed position is that we all have to pay taxes because they help develop our nation. But the law is very categorically correct that the tax-payer has to pay right amount. K1.2 billion is a lot of money,” argued Kaluluma who is managing director for EK Tax Consultant.

Kaluluma said his client won’t be pressured to pay ‘wrong amount of taxes’, arguing they decided to seek court redress on the issue after MRA failed to correct the disputed figures.

He accused MRA of disobeying court order after it managed to evade a High Court order Mike Appel and Gatto Limited through lawyer Frank Mbeta had obtained, stopping the tax-collector from effecting its Distrait Order.

The court order was obtained soon after MRA had already closed down the company’s offices and seized several vehicles from its showroom in Blantyre.

MRA Deputy Director for Corporate Affairs, Steven Kapoloma said if the company was free to take up its grievances with the court of law.

Kapoloma said MRA’s actions were in line with Section 107 (3) of the Taxation Act and Section 40 (2) of the Value Added Tax (VAT) Act.

“This action comes about after all other efforts to have the outstanding taxes paid were duly  exhausted,” explained Kapoloma. “Tax evasion is a serious offence under tax laws and the Malawi Revenue Authority will always endeavor to bring to book all non- compliant taxpayers.”

A summary that MRA issued, shows that Mike Appeal and Gatto had evaded paying K495 million which has attracted penalty and interests of about K741 million.

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.

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).

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.