Members of Parliament (MPs) have hit at Malawi Revenue Authority (MRA) for not recovering K4.5 billion in tax arrears that State-run Malawi Broadcasting Corporation (MBC) owes the public tax collector.
The MPs—under the budget assessment cluster of Industry, Trade and Tourism; Media, Information and Communication—wondered why MBC was apparently being spared when the same public tax collector recently sealed the privately-owned Times Media Group on a similar tax arrears issue.
While members of this cluster were raising the MBC arrears question, another cluster in the next room—the Public Accounts and Budget and Finance—was grilling MRA on a similar case.
MRA was asked why it was lenient with the public entities when enforcing tax compliance as compared to players in the private sector.
In response, MRA commissioner general Thom Malata said it was not like the public tax collector backs public institutions and attacks the private sector.
He said: “We have been in negotiations with the public institutions. It is not that we favour them, but we agree on certain modalities. We leave them to operate, but if institutions do not want to discuss with us, we act.”
During the meeting with MBC, committee chairperson Sam Kawale set the ball rolling by asking the delegation from MBC why they were spared the wrath of MRA when their arrears date back to 2006.
He observed that the public broadcaster did not seem to have included the modalities of repayment of the tax arrears in its proposed budget for the fiscal year 2017/18.
Said Kawale: “Why is it that MRA is not shutting you down? What is so special [with you]? K4.5 billion is a huge sum of money. I am also wondering why this amount hasn’t been included in the current budget as one way of repayment. Are you saying you want the debt to continue accumulating?”
In his response, leader of the MBC delegation at the meeting, director of programmes Geoffrey Kazembe, said the taxpayer-funded broadcaster is operating with a lot of challenges.
The problems, he said, started from the time Parliament allocated it a nominal K1 as a protest over its biased coverage against the opposition in 2007.
Kazembe, who is MBC’s director of news and current affairs, said the issue with MRA was worrisome and he appealed for the intervention of the committee even though he explained that discussions with MRA were on-going; hence, the tax collector has not closed MBC offices yet.
“We have been in talks with MRA to discuss this issue. We know that we owe them a large sum of money, but we also have many challenges. That is why we are pleading with the committee to help us, raise the budget in Parliament and, if possible, talk to MRA to write off our tax arrears,” he said.
On why the repayment amount to MRA has not been included in its budget, MBC director of finance Kennedy Singano said the money allocated to the institution is not enough; hence, they did not bother including it in the budget.
He said that was why MBC was pleading with the committee to lobby for increased funding for the broadcaster.
Said Singano: “We haven’t included how we will repay the money because the current budget allocation has a deficit and our activities are also affected that we cannot add this. But, as indicated earlier, we are discussing with MRA. That is why we are running up to now.”
In the 2017/18 National Budget, MBC requested K3.1 billion, but was allocated K1.9 billion, leaving a deficit of K1.1billion.
Apart from owing the MRA, MBC has K528 million pension arrears, owes institutions such as Malawi Telecommunications Limited (MTL), Copyright Society of Malawi (Cosoma) and the Technical, Entrepreneurial, Vocational Education and Training Authority (Teveta) a combined K500 million.
On the other hand, government ministries, departments and agencies (MDAs) owe the broadcaster in excess of K400 million in unpaid commercials.
Committee members suggested to MBC to refer to Treasury the issue of the K400 million for possible off-setting. But the MBC team said Treasury turned down such a proposal and that was the reason they were lobbying the committee.
But a Treasury representative, Gilbert Nkosi, told the meeting that waiving the arrears was not possible.
He said: “That suggestion of waiving cannot just be adopted. It requires extensive discussions.”
Tax laws do not allow waiving of tax arrears, added Nkosi. n