National News

House amends VAT bill to protect consumers

Members of Parliament (MPs) yesterday proposed and approved an amendment stipulating that consumers who fall prey to unscrupulous traders attempting to evade paying value added tax (VAT), should not be punished.

Minister of Finance, Economic Planning and Development Goodall Gondwe yesterday tabled the VAT Amendment Bill seeking to adjust penalties for businesses which fail to account for or remit VAT or fail to use the Electronic Fiscal Device (EFD).

The Electrical Fiscal Device assists MRA to track transactions
The Electrical Fiscal Device assists MRA to track transactions

The amendment bill proposed a minimum penalty of K500 000 or K1 million and imprisonment for two years for most of the offences.

But while the majority of MPs were in support of the proposed amendments, it was Section 46 (e) 1 which did not please them as they felt it was punishing innocent consumers when it is traders who would be evading tax.

The amendment reads: “A person who, after purchasing goods or services fails to demand and retain a fiscal receipt or fails to report refusal by a user to issue a receipt, would be liable to a penalty of three times the tax payable.”

Salima Central MP Felix Jumbe (Malawi Congress Party-MCP) argued that most Malawians in rural areas were illiterate and did not realise the implication of accepting goods without a receipt.

He said: “We cannot afford to penalise these Malawians with K500 000. We do not want this, it is a colonialist mentality.”

Gondwe said that VAT legislation only applied to businesses with capital of K10 million and above and these would be the targets to ensure compliance.

After much debate without resolution, it was Dedza North West MP Alekeni Menyani (MCP) who proposed an amendment which was adopted unanimously, to protect the unsuspecting buyer. n

Tax penalties worry MPs

Related Articles

Back to top button