The Malawi government plans to set-up a tax tribunal which will be functional once Parliament approves the legal instruments for its existence and operations, Business News has learnt.
A tax tribunal is an administrative court that hears tax appeals. Currently, the law requires that tax matters be handled by a magistrate as special administrators and cases that are referred to the high court for appeal.
The Ministry of Finance, Economic Planning, and Development and Ministry of Justice and Constitutional Affairs are spearheading the setting up on the tribunal.
In a written response to a questionnaire, Ministry of Finance, Economic Planning and Development spokesperson Davis Sado said the tax tribunal will ensure that tax appeals process is more efficient through timely resolution of disputes.
“The concept note and terms of reference [ToRs] have been done. Currently, stakeholders’ consultations on the tax tribunal are under way. This will be followed by the development of a legal framework.
The tax tribunal can only be functional once Parliament approves the legal instruments for its existence and operations,” he said.
Ministry of Justice and Constitutional Affairs spokesperson Apoche Itimu was yet to respond to a questionnaire.
However, sources confided to Business News that currently, two magistrates have already been assigned to the tribunal and they are on.
Tax consultant Emmanuel Kaluluma said while the tribunal will help to clear a backlog of tax cases that are yet to be resolved, tax payers will also be accorded a right to be heard and develop their businesses further.
“We have tax cases over which judgement has not been delivered but they happened more than 10 years ago. Sometimes MRA [Malawi Revenue Authority] makes a mistake and if the decision does not pass by the courts to show who is right or not, taxpayers suffer the most,” he said.
Kaluluma said because business decisions survive on time, taking time to solve such cases means organisations cannot decide on increment for employees and grow further.
“If the court takes time to resolve the matter, it means government is keeping money for taxpayers for nothing,” he said.
However, Kaluluma warns that it is important to ensure that proper mechanisms are put in place to avoid corruption.