Africa-Press – Malawi. Government Ministries, Departments and Agencies (MDAs), parastatals and private sector firms owe the Malawi Revenue Authority (MRA) K61 billion, MRA Commissioner General John Biziwick told the Budget Committee of Parliament on Tuesday. Biziwick said among the culprits are water boards, local councils, various MDAs and State-owned Auction Holdings Limited (AHL).
According to the figures that he presented before members of the committee, water boards owe MRA a combined K13 billion, AHL K13.9 billion, local councils around K5 billion, while MDAs and parastatals owe the tax collector about K22 billion.
The remaining K7.1 billion is with private-sector firms. Biziwick said some of the outstanding tax arrears date back to six years ago. He indicated that what they do as MRA is that when entities have tax arrears, the authority discusses with the entities involved on how they intend to square the bill.
“For government companies, we discuss with them directly or through the Department of Statutory Corporations,” the MRA chief said.
On AHL, Biziwick said over the past six years, the company has not been collecting enough cash through which it could pay Value Added Tax, Withholding Tax and Pay As You Earn “as everyone knows that the tobacco sector has not been doing very well”.
“These have accumulated over the past five to six years. We did engage them and it took time before government came to their assistance. I think about a few months ago, government provided them with about K12 billion.
“But because their obligations were so huge, they only managed to pay us a bit and they had to satisfy other creditors as well.
“In particular, I think the choice they had was to pay salary arrears or to pay us tax arrears. That is what has happened. It is an ongoing discussion; we are still engaging AHL to see how best they can settle the tax arrears,” Biziwick said.
He, however, indicated that MRA cannot approach the Ministry of Finance on AHL because the authority knows it is a private company, owned by Admarc which is owned by government.
Biziwick told the committee that in the worst case scenario, MRA does close the defaulting firms but that the tax collector cannot close AHL as it would inconvenience tobacco farming in the country.
Budget and Finance Committee Chairperson Gladys Ganda said the lawmakers will follow up with the defaulting firms to see how best they can help MRA in collecting the tax arrears.
Ganda said failure by the firms to pay taxes to MRA affects the ordinary person in the village as they may not find drugs in hospitals as well as fertiliser for the Affordable Inputs Programme.
“Our role as the Budget and Finance Committee of Parliament is to ensure that what MRA budgeted is collected and we have to assist them finding out from the other players why they are not remitting the taxes,” Ganda said.
In the first nine months of the 2022-2023 fiscal year, which ended on December 31, 2022, MRA managed to collect K1.14 trillion, beating its nine months K1.138 trillion budget by K1.19 billion.
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