Recently, an irate group of concerned citizens penned the Malawi Revenue Authority (MRA) as well as Officer-In-Charge for Chitipa District to have officers at Mbilima Border Post in removed. Their argument is that it is absurd for MRA to continue collecting tax revenue when the road network between Chitipa District and the border post is in bad shape. Our staff writer DUMBANI MZALE engaged MRA spokesperson, who is also MRA Head of Corporate Affairs, STEVEN KAPOLOMA to delve more into why is it still necessary for Malawians to continue paying various forms of tax amid some inefficiency or other negative externalities on taxpayers:
Why is it still necessary for Malawians to continue paying tax to MRA. What do you say to that?
Let me first begin by saying that the purpose of MRA is to collect revenue on behalf of government. The authority is responsible for the assessment and collection of specified revenues including protecting the society from harmful goods. When the need arises, enforcement of tax laws is effected. The tax that MRA collects assures Malawians of various social services and development projects from government by largely funding the national budget. The items that taxes finance include buying medical supplies, building and maintaining schools, hospitals and roads. Taxes are also used to fund training, hiring and salaries of public service officers such as teachers, doctors and security personnel. These taxes are used in almost every sector of the economy. Suppliers of goods and services to government are paid by the taxes collected here in Malawi.
To put it simply, it is very necessary to pay tax as governments world over survive on tax revenue, apart from other sources of financing their operations. Our emphasis to taxpayers, all Malawians and members of the general public is that no country across the globe has ever developed because of the generosity of others, or other countries. Therefore, sustained adherence to tax laws and voluntary tax compliance will ensure the country of adequate resources to implement the various social economic programmes for the benefit of all Malawians.
Some disgruntled people have of late vented their anger on government by removing MRA roadblocks in an attempt to refrain from paying tax. Why is this the case and how dangerous is this malpractice?
As indicated earlier, Malawians are the beneficiaries of taxes collected by MRA as it funds the national budget. MRA officers should be allowed to work from every corner of the country in order to collect tax revenues, which is a crucial resource to the national budget to ascertain social service provision and development projects. Anyone who has a genuine concern regarding our operations is free to directly contact us so that their concerns are addressed.
Some say MRA has a bad working relationship with border communities. What is your take on this one?
Actually the opposite is true. It should be emphasised clearly here that MRA has a good working relationship with border communities and the nation at large. In addition to the actual tax collection, MRA undertakes initiatives to counteract tax fraud and other forms of fiscal evasion. Hence, the good working relationship that we always cherish with the public including border communities is facilitating continuous provision of relevant detail to the MRA regarding tax evaders and smugglers. In a nutshell, we enjoy a good working relationship with border communities ever since, despite recent few and isolated cases
We have also seen people smuggling in and outside of the country goods, and in the process evading the paying of tax. What is the magnitude of this problem and what strategies do you have handy to corner perpetrators or else to ameliorate the intensity of the problem?
MRA promotes voluntary tax compliance to the highest degree possible while administering tax always. As alluded earlier, when the need arises, enforcement of tax laws is effected. Strategically, the authority takes such measures as may be required to improve the standards of service given to taxpayers with a view to improving efficiency and effectiveness and maximising revenue collection. There are various revenue collection strategies that MRA uses and in almost all of these we continuously engage taxpayers and members of the general public including surrounding communities to ensure sustainable tax compliance in a voluntary manner.
The authority implements widespread and customised tax awareness activities to inform and educate people in the country about MRA’s mandate, taxes and the roles of individuals in tax collection. This is being done by members of the general public who are using our Informant Scheme that is accessible at station level and Tip-Off Anonymous. Rewards of 10 percent of tax collected or a maximum of K500 000 is given to successful tipsters.
MRA has introduced what is called Msonkho Online System. How important is this system?
We have initiated this system to ensure maximum convenience and aid voluntary compliance. We are piloting the system in Mzuzu and Blantyre Domestic Taxes stations. Basically, this is an integrated tax administration system that will enable taxpayers to register for tax, file returns, pay taxes and access tax services online at any time. MRA is implementing this system to enhance efficiency and effectiveness in tax compliance and taxpayer service management by improving and automating business processes in the Domestic Taxes Division. The main feature of the system is online services. The system provides a premier taxpayer service, where you can quickly and easily obtain consistently accurate tax information 24/7 via the portal www.mra.mw/msonkhoonline. You will not be required to come to MRA offices to register for tax, file return or pay taxes. The system is quick, easy, tailored, and secure, and allows you to manage your tax transactions at a time that is convenient for you. The authority is implementing the system as part of the modernisation programme which aims at improving efficiencies in revenue administration. This system will be managing a range of domestic and international trade taxes, including but not limited to income tax, value added tax, withholding tax, fringe benefits tax, provisional tax, turnover tax, and pay-as-you-earn [Paye].