The Economic Empowerment Action Group (Eeag) is shocked with the purchasing prices of Malawi Revenue Authority (MRA) Electronic Fiscal Devices (EFDs)—electronic cash registers for value added tax (VAT).
The group fears that the prices will choke the operations of small businesses.
According to information that Business News has sourced, some distributors are selling the EFDs at an introductory price of up to K400 000 each.
Eeag president Lewis Chiwalo, in an interview on Friday, said although the EFDs are a welcome development in VAT collection and auditing, their prices are beyond the reach of many businesses.
“We are not against the implementation of the EFDs which will essentially improve VAT collection which is good for the country but we are shocked with the prices of these gadgets,” he said.
But MRA argues that VAT operators who procure the EFDs within four months from the commencement of each phase shall recover the whole cost of the EFD from MRA through the following month’s VAT return.
But Chiwalo argued that the cost recovery scheme is for a short period after which traders will have to meet the costs on their own.
In neighbouring Tanzania, prices for EFDs range between $375 and $487 (approximately from K160 000 to K200 000) with the amount being recovered gradually through tax rebates annually, according to a statement by that country’s revenue authority issued in November last year.
According to MRA the initial phase commenced on March 6 2014 and applies to operators that were issuing manual receipts or were using ordinary cash registers—those registers not attached to any computer system or Point of Sale (POS) devices.
The tax authority has further said the deadline for this group is June 30 2014 after which it will be an offence to issue a “non-fiscal receipt” and MRA will take stern measures against such traders.