Blantyre, Malawi Revenue Authority (MRA) on Thursday confiscated about 213 bales of second hand clothes suspected to have been purchased without issuance of valid fiscal receipts and under-declaration of sales.
MRA Head of Corporate Affairs Steve Kapoloma said Friday at Ginnery Corner warehouses where they were off-loading the goods in the presence of the media that the bales were intercepted in Limbe in transit to Mangochi.
We have seen that the owners of these bales have not paid value added tax (VAT) which means that the traders have not issued VAT on all the 213 bales that we have intercepted.
They have paid VAT on some bales while some bales literally have no VAT paid, he said.
Kapoloma further said the second offence is that of under-declaration.
We have seen that these bales in any ordinary market value would cost above K120, 000 to K130, 000 each but the amount on the VAT receipts we have collected are far much below the market price which is K80, 000 and K60, 000.
[This] is a clear indication they connived to under-declare the sales, he said.
Kapoloma said non-issuance of an electronic fiscal device (EFD) generated receipt is against section 25 of the VAT Act which mandates traders to issue electronic receipts on all sale transactions. He said the under-declaration of sales is a serious offence under section 46 (b) of the VAT Act.
The non-issuance of EFD is an offence that attracts a penalty of K500, 000 or ten times the value of VAT involved, whichever is greater in line with section 46 (a) of the VAT Act, he said.
Kapoloma said under-declaration, on the other hand, attracts a penalty of K5 million or 20 times the value of VAT involved, whichever is greater.
However, if we take the matter to court, upon conviction by the court, the suspects may be liable to a fine of K1 million and imprisonment for two years in line with section 469 (b) for the non-issuance of an EFD receipt offence.
[As for] the under-declaration offence, the suspects may be liable to a fine of K10 million and imprisonment for five years in line with section 46 (b), he said.
Kapoloma said MRA is investigating the matter and will act appropriately to ensure that the tax evaded is paid and the culprits penalised in accordance with the law.
Currently, we are categorising and ordering the bales according to the shops where they were bought; and once we have done that, we will marry that with receipts that we have that were used to purchase these goods.
Thereafter, we will launch a very serious and robust investigation on these traders in order to establish the truth and make sure that all the revenue is recovered, Kapoloma said.
Source: MANA Online