MRA evades court order on Mike Appel K1.2bn tax evasion

The Malawi Revenue Authority (MRA) on Monday managed to evade a High Court order Mike Appel and Gatto Limited had obtained, stopping the tax-collector from sealing its offices over K1.2 billion unpaid taxes.

MRA sealed the offices of Mike Appel and Gatto Limited in Blantyre and Lilongwe and seized a number of cars in the company’s showroom for failing to remit taxes.

But the company through a hired private practicing lawyer, Frank Mbeta obtained a court order stopping the tax-collector from effecting its Distrait Order.

However, the court order came in too late as MRA had already closed down the company’s offices and seized several vehicles from its showroom in Blantyre.

It is yet to be seen what next step the car dealer who owes government K1, 236,036,927.20, is going to take.

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).

MRA Deputy Director for Corporate Affairs, Steven Kapoloma said the Distrait Order was 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 Endeavour to bring to book all non- compliant taxpayers”

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.

The hiring of lawyer Mbeta will somehow raise eyebrows considering that he was once accused of bribing MRA officer to delete information relating to a businessman charged of tax evasion.