Centre for Democracy and Economic Development Initiatives (CDEDI) has accused the Malawi Revenue Authority (MRA) of favoring Malawians of Asian origin in enforcement of tax laws.
CDEDI Acting Executive Director Sylvester Namiwa raised the complaint in a letter addressed to MRA Director General John Biziwick dated October 12, 2020.
In the letter Namiwa cited a tax evasion case involving Faizal Latif of Mapeto wholesale, in which MRA returned goods it confiscated without proper hearing and probe.
Below is the letter;
12th October 2020
The Director General,
Malawi Revenue Authority,
ATT: MR. JOHN BIZWICK
CC: The Director General, The Anti-Corruption Bureau
RE: CONCERNS ON THE MRA‚ÄôS PRERERENTIAL TREATMENT IN THE TAX LAW ENFORCEMENT AND APPLICATION BETWEEN THE INDIGENOUS MALAWIANS AND MALAWIANS OF ASIAN ORIGIN
The Centre for Democracy and Economic Development Initiatives (CDEDI) has been called to action to write your good office, Sir, on behalf of Malawians from different parts of the country, especially those involved in cross border trade, who have raised concern through our office on the Malawi Revenue Authority (MRA‚Äôs) selective application of the tax laws and regulations.
Two cases that would help to illustrate and validate the matter at hand have been used. They are contained in a letter from a concerned citizen to CDEDI attached and marked as Annex 1. This letter is from a concerned citizen, and is on the incident which happened in Mzuzu on September 24, 2020 where angry business people in the city dumped a casket containing the remains of an indigenous business person, Denis Katsache at the MRA offices. This was in reaction to circumstances that led to his death. It is reported that Katsache died of Hypertension after MRA officials impounded his vehicle for tax evasion, after MRA officials reportedly demanded extra money, even though he had paid the required K3 million at Songwe border for the goods he had imported.
What triggered this anger among the business community and relations of the deceased was the fact that the impounding of the goods was effected after the deceased had paid the initial tax he was charged by the MRA, but after noting an anomaly, the officials treated the late Katsache as if he would run away and never be traced at all!
Sir, as you are reading this, MRA has lost a taxpayer; the Malawi government has lost a productive citizen who was contributing to the country‚Äôs GDP; the family has lost a husband and a father; the unemployed have lost a prospective employer. CDEDI, and indeed all Malawians of goodwill believe that this untimely death could have been avoided if only the MRA had treated the late Katsache fairly.
It is also worth pointing out that CDEDI does not condone or let alone side with lawbreakers, but as they say two wrongs do not make a right. We believe the late Katsache‚Äôs case deserved fair and reasonable assessment.
The late Katsache‚Äôs incident brings us yet to another case involving the MRA, which has left a lot of well-meaning Malawians with more questions than answers. The issue seems to be in sharp contrast to that of the late Katsache. CDEDI has attached a search warrant marked as Annex 2. The search warrant is under criminal case 277 of 2019 obtained at the Blantyre Magistrate court dated August 14, and it authorised the MRA to investigate Mapeto wholesalers on suspicion of tax evasion. It also allowed the MRA to search NBS premises and take possession of documents tendered in court.
According to the warrant, the matter involved tax evasion. NBS acknowledged receipt on August 27, 2019.
The search warrant came into the lime light after an article appeared in The Nation newspaper on August 3, 2020, in which MRA Head of Corporate Affairs Steve Kapoloma admitted that the case had delayed due to Covid-19 travel restrictions, claiming that the MRA officials were supposed to travel to China to verify the actual price of the goods Mapeto Wholesalers had imported.
It is also worth mentioning that Faizal Latif, the proprietor of Mapeto claimed in the same article that by the time the newspaper was publishing the article, the goods in question had already been released. However, the newspaper retracted the story and apologised to Latif on August 3, 2020.
What is more surprising is that MRA released Mapeto‚Äôs goods even before the tax evasion issues were concluded. Secondly, MRA is hiding behind the COVID-19 pandemic whose first case was officially confirmed by the Malawi Government in April 2020, and yet the search warrant for Mapeto was issued in August 2019, eight (8) months prior to the COVID-19 situation in Malawi! Why has the MRA dragged its feet this long?
If the response given by Latif is anything to go by, then it is apparent that negotiations had taken place between MRA and Mapeto wholesalers. Why was the late Katsache not treated in the same manner?
Would CDEDI be wrong then to conclude that the MRA gives preferential treatment between the indigenous business people and the Malawians of Indian origin who are prying their trade in the country, given the late Katsache‚Äôs and Latif‚Äôs incidences?
Now that the COVID-19 travel restrictions are slowly being lifted, CDEDI and all Malawians are waiting with baited breath to hear from the MRA on how the Mapeto saga would be concluded, as your office Sir, would now be able to travel to China to finalise its investigations. Failure by the MRA to conclude the Mapeto saga would be deemed by CDEDI that your office Sir, treats some business people, specifically the Malawians of Indian origin as sacred cows.
For your own information Sir, the budget statement the Minister of Finance Felix Mlusu delivered in the national assembly on September 11, 2020 page 30 bulletin 104 concedes that government is aware of rampant tax evasion issues in the country.
The Mapeto incident happened before you assumed office Sir, and we, therefore, do not want to conclude that the MRA‚Äôs cold feet on the incident is a signal that your office is sweeping the scam under the carpet. It is against this background that CDEDI, on behalf of the country‚Äôs citizens, is giving your office seven (7) working days to hear from you on the progress that is being made on the Mapeto wholesalers‚Äô saga.
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