Fighting the bear called tax evasion

Malawi has been awash with the golden jubilee celebrations. The pomp created by this has received mixed reactions as to whether Malawi has really achieved what she had wanted when fighting for independence.

Having born in post-independence era and read the history of this beautiful nation, I realised that Malawi has achieved great things. But I also realised that Malawi can achieve much more if all Malawians borrow a leaf from the freedom fighters.

The freedom fighters of this land fought for what is being enjoyed today by even giving the last drops of their blood. They fought not out of greed but under the banner of patriotism. They made sure they chased the monster of colonialism into the cave.

Today, some Malawians choose to remain mute or act as hypocrites. They speak intelligibly but they cannot stand to shed even a single drop of sweat for this nation.

Let us take the issue of tax for example. It has been a tradition that donors have been supporting us in our developmental agenda since independence. Today signs of donor fatigue are evident mainly due to the economic meltdown and this has not only affected Malawi but many developing nations.

Pessimists feel that without donors Malawi is a ‘dead nation’ but I beg to differ! We have resources within the country and ability to uplift our nation. One way we can make our country vibrant without donors is through paying our taxes.

Some Malawians are paying their fair share of taxes while many others do not. In many scenarios   those who do not religiously pay taxes are the group that act in a hypocritical way by shouting their voices hoarse in demanding effective public services, good hospitals, handsome salaries for the civil service and beautiful roads while on the side they are also busy evading taxes.

If Malawi has to go on without donors then these acts of hypocrisy must be stop and payment of correct tax must be the tradition. We need not only to pay our share of taxes but we must as well support Government efforts in improving tax administration in Malawi.

A clear manifestation of the hypocrisy experienced when collecting taxes has also appeared after the introduction of a smart means when collecting Value Added Tax (VAT).

The Malawi Government, in its quest to maximise revenue collection, empowered the Malawi Revenue Authority (MRA) to introduce the Electronic Fiscal Devices (EFD). These are machines that will help curb non-remittance of VAT to MRA as sales transactions are now monitored electronically.

This development means that when a consumer pays for a product or service, the EFD will register it and transmit details of all the sales to MRA servers hence providing evidence of sales transactions in a technically-easy and undisputed way.

Many countries embarked on this system to increase revenue collection and it is an easy way of tracking VAT collections.

In Tanzania they realised an extra Tsh1, 086,374 million of revenues in their 2011/2012 financial year after the introduction of the fiscal devices.

In the case of Malawi, after a thorough research, MRA observed that some traders were compliant when paying VAT while others were not.  In order to level the playing field, the Government of Malawi amended the VAT law in 2011 to introduce the fiscal devices. These gadgets are mandatory by law. They were adopted to clear the mess.

Already there has been reluctance by some traders who know that their crookedness, when it comes to remitting VAT, will easily be exposed because with the EFD the Authority will easily notice who were underpaying the tax which can lead to an instant probe.

These unpatriotic citizens are making excuses about the system so that they continue to evade tax revenue. They concoct piles of unfounded claims and misled fellow traders and anyone who can listen to them that the system is not working, yet they themselves are not even registered in the system.

One such false claim is that the EFD machines only produce one receipt and that the VAT operator has no evidence of transaction after giving the only copy to a customer.

This is not only false but misleading. A trader using Electronic Tax Registrar or even electronic fiscal printer can print a fiscal receipt for the customer and he can also print copies of the same receipt for his record.

The EFD has empowered the trader with an option. He can choose to keep his records as electronic in the EFD, or he can print a copy and keep. Further, he can transfer the information into a computer or any other storage mechanism he prefers.

He can also print his entire records from the computer using the normal printer and the devices also stores information about all transactions in the memory called electronic journal from where a VAT operator can assess and even print for his own use at any time he wishes.

The other false claim peddled by these unpatriotic Malawians is that information printed on the receipt only last for three day. Again, these Malawians who choose to be mute in payment of taxes are not only economic with the truth but are pulling the nation backwards with their misinformation.

The roll paper in question is imported and is called thermal paper and it is made to last for five years. It reacts when exposed to things like excessive sunlight, spirit, alcohol, adhesives etc. So to say that it fades after three days is just a lie.

Our fallen heroes fought colonialism to the cave. Today, we need to fight tax evasion to the cave. The EFDs are there to chase the new beast to the cave, to see to it that our taxes are remitted to the public pulse.

As we celebrate this golden jubilee, let us respect the fallen heroes who had wanted this nation a better place for us all in their patriotism. One way of showing respect is by paying our fair share of taxes. Selfishness and greed won’t take us anywhere.

We do not have another Malawi, we belong to this land. Remember, the more people evade tax, the more we are throwing our nation into the dungeon which is suicidal. Let us all fight tax evasion into the cave!