RBM says some businesses under-declare proceeds

 

The Reserve Bank of Malawi (RBM) Governor Dalitso Kabambe has bemoaned the tendency by some businesses to under-declare imports and exports to make huge profits.

In an interview last week in Lilongwe, he said the central bank is working with the Malawi Revenue Authority (MRA) and the Financial Intelligence Authority to bust such cases which he said are rising.

Kabambe: We are investigating
various cases

“This issue is serious and we are currently investigating various cases. There are unscrupulous businesspeople in the country who export things and do not properly declare the exports so that they externalise foreign exchange.

“There is a business entity which exported 70 containers of pigeon peas and only declared two. This is a serious issue and even the President [Peter Mutharika] has condemned it.”

Kabambe was responding to a query that some businesses are exporting agriculture commodities to east Africa without declaring the total quantity of their exports.

He said so far, 70 cases have been identified and the police have also been engaged to bring the culprits to book.

MRA head of corporate affairs Steven Kapoloma in an interview said they are working with RBM and other institutions to deal with the issue.

“We have been working closely with RBM for a long time to ensure that we deal with this matter,” he said.

Malawi Economic Justice Network (Mejn) executive director Dalitso Kubalasa said in an interview that under-declaration of imports and exports is robbing the economy of its deserved potential domestic resource mobilisation, particularly as the country remains saddled with a huge fiscal pressure in the budget.

“Against this backdrop is the rationale why Mejn’s previous and subsequent recommendations continue being directed towards identification of efficiency enhancement mechanisms in any potential domestic resource mobilisation; resource allocation and utilisation,” he said.

He said that overall, with such huge loopholes sealed, it will be easier with much less fiscal pressure to allow for all monetary policy efforts to continue addressing further declines in macro-economic stability and productivity, including the development of budgetary allocations for the social sectors.

“For instance, the wage bill along with interest repayments on debt have continued taking up almost everything it has to spare far outweighing the goods and services it is supposed to provide its people with,” he said.

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