MCCCI wants voluntary tax compliance extended

Malawi Confederation of Chambers of Commerce and Industry (MCCCI) has asked for an extension of the Voluntary Tax Compliance Window (VCW) to give further relief to businesses heavily affected by the Covid-19 pandemic to fully recover.

MCCCI’s call comes a month after the Malawi Revenue Authority (MRA) closed the VCW on November 30, having collected K4.6 billion in tax revenue.

The window opened on April 8 last year for six months up to October and was extended up to the end of November to allow businesses heavily affected by the Covid-19 pandemic to pay their tax dues without penalty, interest or any charge.

MCCCI head of membership development and communications Tione Kafumbu, in an interview on Thursday, said the window was a relief for businesses with tax arrears, but said most companies are still facing cash flow constraints.

When MRA extended the window for one month, it softened the measures to allow taxpayers’ to submit self-assessed (unaudited) accounts. 

But Kafumbu observed that though the window provided relief to businesses to regularise their tax affairs without suffering penalties, most of them are still struggling.

He said: “Although others benefited from the tax window, most businesses were badly affected by the pandemic such that they could not pay taxes during this window.

“This, therefore, means that an extension of the widow would be helpful for businesses that are heavily affected.”

MRA head of corporate affairs Steve Kapoloma was not readily available to comment on the matter, but in an earlier interview, he indicated that taxpayers benefited from the window.

He said that since the window opened in April, about 4 000 taxpayers availed themselves to sort out their tax obligations.

Out of the total applications considered for the VCW, MRA realised K4.6 billion from 180 applicants.

Through the exercise, MRA projected to waive K2.17 billion in revenue.

Beginning January of last year, coronavirus devastated the world in so many ways bringing big and small economies alike on their knees.

Countries, including Malawi, turned to extreme measures of shutting down their economies to contain the virus; hence, in the first the first two quarters of 2020, the country experienced reduced external financial inflows due to the world recession which affected import payments.

This, coupled with the restriction in movement of goods, affected businesses operating in the country, especially those in the manufacturing sector whose raw materials are imported as well as the retail and wholesale sector.

MRA director of policy, planning and research Wazi Ligomeka earlier appealed to tax non-compliant companies and individuals to take advantage of the window to settle their arrears, warning that “going forward there it will be business unusual”. 

MRA introduced the six-month VCW to relieve businesses by allowing non-compliant taxpayers and those with arrears to pay without penalties and interests.

This is the second time for MRA to have VCW as in 2013/14 financial year, it also opened a similar window.