Malawi Revenue Authority (MRA) is set to role out an automated withholding value added tax (VAT) system to ensure efficient and effective operations of the scheme.
In a statement issued in the media says the system will interface with appointed withholding VAT agents and all suppliers of goods and services.
MRA says the introduction of the automated system is in line with the VAT-Withholding Agents Regulations of 2018.
The appointed Withholding VAT agents levied on supply of goods from individuals and business entities include government Ministries, Departments and Agencies (MDAs).
“The interface will allow the agents and suppliers to log into the system using a portal on our website: www.mra.mw [which] will enable the supplier to view summaries of the VAT withheld and payments of the VAT withheld.
“The system will, therefore, promote validation, accountability and transparency of the Withholding VAT transactions.
“Since the legal obligation of remittance of VAT for such transaction is shifted from concerned suppliers of goods and services to the appointed Agents, we wish to advise all suppliers that a VAT invoice raised should not be VAT inclusive.”
MRA further reminds the agents and all suppliers of goods and services that withholding VAT is “not a tax but a method of collecting VAT and all those concerned are urged to comply with the new regulation in order to avoid penalties”.