MRA says Reserve Bank has case to answer on scam

Malawi Revenue Authority (MRA), which has denied borrowing from commercial banks to spruce up revenues, has said the country’s central bank-Reserve Bank of Malawi (RBM)-also has to answer how huge sums of money from commercial banks’ liquidity reserves found their way into a government
account.

Reports surrounding the tax collection institution so far indicate that almost K30 billion was borrowed from commercial banks to top up revenue shortfalls with Minister of Finance Ken Lipenga facing the lap for the scandal.

However, in a twist to the events surrounding the scandalous borrowing MRA boss Lloyd Muhara revealed to a Budget and Finance Committee of Parliament that the money was meant to “fool” the IMF into believing that the zero-deficit budget was working.

MRA boss Lloyd Muhara: He kicked up a stink on Ministry of Finance revealing the top state secret

“As MRA we did not borrow any money from the banks and the said funds went straight into the government Account Number One at the RBM. There is nothing showing in our accounts that MRA received the money meaning we did not borrow any money,” said the chief tax collector.

He added: “This is a tax policy issue and Ministry of Finance issue. The ministry took the decision that it took. A lot of institutions are involved and the RBM is at the centre of it. If the committee minds to get further information, the RBM is there to also explain.”

RBM sources confided in Nyasa Times that in fact the money came from the banks’ liquidity reserves-special accounts at the RBM which act as the commercial banks’ security in the running of their businesses.

The sources said this money can only be withdrawn or transferred into another account with the authorization of the RBM and the central bank’s governor in particular. At the time of the borrowing in December 2011, fired Perks Ligoya was the head of the central bank.

Muhara also said MRA had no hand in the wrong information presented in Parliament by Lipenga who initially denied the borrowing only to admit it after being reappointed to his former post by the new Joyce Banda administration.

In the meeting with the parliamentary committee an MRA team explained how the revenue authority was used as a conduit, how Ministry of Finance forced them to refute the revelation after it came out in Parliament, and how the borrowing system has been used for a number of year in the past.

“This was done specifically for an IMF programme and the system has been used before. When it came out that MRA borrowed the money the Ministry instructed us to refute the allegations and we just uploaded exactly what the Minister said in Parliament,” he said.

Other commentators have said that if indeed the system was used before with the aim of impressing the IMF then Lipenga has done the most scandalous thing in revealing what could be termed as a “top state secret.”

Muhara met the committee on Thursday along Deputy Commissioner General Chrispin Kulemeka, Director of Policy Planning and Research Rosa Mbilizi, Head of Finance David Loga, Head of Legal Services and Company Secretary Felix Tambulasi, Commissioner for Domestic Revenues
Nellie Juma and Head of Customs Operations Rexon Kachala.

After meeting the committee on Tuesday, the MRA management was given two days to explain the scam.

On Thursday after hearing out the seven, Committee chair Eunice Napolo said her committee will come up with a report that would be later presented in Parliament.

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