Do musicians evade tax?
The law obliges every citizen to contribute to the public purse in the form of taxes that are paid to government through the Malawi Revenue Authority (MRA).
In fact, government will not be able to provide social services to its citizens if it did not collect tax.
According to MRA, there are no exceptions when it comes to paying tax.
But so far, it seems the music industry is an exception.
“Anybody who is earning income in Malawi as a result of them engaging in economic activities in the country is required to pay taxes, therefore, it is the duty for anyone earning income to declare and duly pay taxes,” reads the Taxation Act.
This means whenever artists make money out of shows or the sale of CDs, they are obliged to declare their returns with MRA and pay a percentage of it as tax.
But what is the problem when it comes to musicians meeting their legal obligation?
“To me MRA is government and as government, it has to say what it is offering to me as an artist in terms of building my talent and not what we should give it. There’s nothing that government does for us in terms of welfare, so why should they be interested in what we make?
“If anything, they have to civic-educate us through the Musicians Association of Malawi [MAM] so that we have a clear understanding of the law and what we expect from our government. Other than that, it is absurd to expect much from us when there is little from it,” charged high-flying musician Skeffa Chimoto.
But, MAM president Chimwemwe Mhango has backed the artists.
“As it is, we pay all the normal taxes like citizens of this country.
“On top of that, we pay for venues which they are taxing. Atiyitane [they should call us], we will tell them why it can’t work as of now.
“The musicians are justified in not paying tax because we are not benefiting from the government as of now.
“The government needs to put proper structures for us. Government needs to build auditoriums, put the cultural policy in place, inject resources in the anti-piracy fight. It should help us contain foreign musicians who are stealing from us. All over the world governments put serious measures to control foreign artists from exploiting the locals. There is a lot that government needs to do,” explains Mhango.
MRA, on the other hand, says musicians, just like other professions, must always declare their income and pay taxes.
“Musicians are taxed directly or indirectly. When musicians hold public shows, it is expected that they should declare the income made from the shows and duly submit a tax return like everyone else.
However if the musicians are privately contracted, 20 percent withholding is deducted by the hiring party and remitted to MRA.
“Income from sell of CDs is also supposed to be declared,” explains MRA’s marketing communication manager Wilma Chalulu.
The arguments being presented by the musicians are weak. Come to think of it, they travel to their shows on roads built by government, use hospitals built by government with nurses, doctors etc trained and employed by gov ment, they went to schools built by government, their children go to the same schools (unless they tell us that either they don’t educate their children or they send them to expensive private schools). Further, they earn much more than most workers in Malawi. Think about a teacher who gets about MK30,000 per month translating to about MK300,000 per annum, d/he pays tax! So, if I were MRA, I would sit down wi the musicians to find better ways of making sure that their music is not pirated (by the way even pirates must pay tax) and that there is a better way of selling the music for transparency and declarations. Alive se adzithera nsonkho or just relocate to Monaco.