Experts speak on tax regulation
Tax consultant Emmanuel Kaluluma says stakeholders need to be grilled on transfer pricing for relevant tax regulations to bear fruits.
He said instituting laws is not enough to combat transfer pricing if officers are not trained on how to detecting such cases.
‘Putting the law in place is not adequate, the officers must be given skills to be able to detect that there is transfer pricing involved. Counters like us are vulnerable because we rely on investments from outside so the investor wants to shift the money back where he can. So we need to improve infrastructure, controls and political stability,” Kaluluma in an interview with Business News.
The country’s transfer pricing regulations contained in Chapter 41:01(Taxation Act) of the Income Taxation Act, Taxation Transfer Pricing regulation 2009, was replaced by new regulation on July 1 2017.
The new regulation provides guidelines for determining the arm’s length price for supply and transfer of goods and services; administrative rules, including the types of records and documents required by the commissioner general of taxes.
Recently, Reserve Bank of Malawi (RBM) Governor Dalitso Kabambe said Malawi loses over $394.60 million (about K240 billion) due to illegal externalisation through transfer pricing.
