MRA to collect K10BN during VCW
The Malawi Revenue Authority (MRA) plans to collect close to K10 billion ($25 million) during the three-month Voluntary Compliance Window (VCW)from November 1 to January 31 2013, an official from the public tax collector said yesterday.
MRA plans to rollout the initiative to encourage taxpayers to come forward on a voluntary basis to regularise their tax affairs with the public tax collector to avoid the payment of penalties, fines and interest.
MRA commissioner of customs and excise responsible for exports, Shadreck Namalomba could, however, not reveal the exact amount they want to collect at the end of the period.
“Of course, we have our own minimum, but if we get close to K10 billion that will be good for the country,” he told journalists on the sidelines of the meeting with the private sector in Blantyre
But speaking earlier during the meeting, Namalomba said the initiative is the first of its kind which happens once in somebody’s lifetime and encouraged businesses and individuals to take advantage of the window.
“I cannot guarantee that we will have another one in the shortest period of time. We believe that three months is the adequate amount of time,” he said.
Namalomba warned that after the expiry of three months, the tax collector will ‘fish out’ those taxpayers that will not have come out voluntarily.
He said they are not limiting the number of years a company can go back to, but advised it is better to reduce the exposure than not paying and that MRA is willing to negotiate with companies on the payment plan.
This arrangement is premised on the understanding that a number of businesses have tax arrears with MRA, particularly because of the economic situation, characterised by the twin shortages of foreign exchange and fuel, most of them were embroiled in the past three years.
In his presentation earlier, MRA economist Michael Masiya noted that the purpose of VCW is to enhance voluntary compliance on good management of the tax systems and best use of resources.
“The VWC is applicable to all taxes administered by MRA. Processing of the application will be immediate and payment of the liability will continue even after the VCW on January 31 2014,” he said.
But Masiya said any offences committed during the VWC period will not be accommodated into the programme.
Businesses eligible under the VWC are those filing returns, but became non-compliant due to unfavourable condition of the past few years, filed incorrect returns, not registered for tax, not declared, misclassified or under declared their importations for duty purpose and those under audit and inspection.
Bertha Misomali, technical accounts officer at the Institute of Accountants of Malawi (Icam), said they welcome the initiative but asked MRA to extend the window period.
“We believe MRA will consider the period considering cash flow issues companies and individuals have to address to comply,” she said.
