Members of Parliament (MPs) under the Public Accounts and Budget and Finance budget scrutiny cluster yesterday took to task Treasury for extending tax exemptions to three parastatals, including the Malawi Communications Regulatory Authority (Macra).
The other two are National Oil Company of Malawi (Nocma) and Malawi Energy Regulatory Authority (Mera), it has emerged.
Budget and Finance Committee chairperson Rhino Chiphiko asked the Secretary to the Treasury Ben Botolo why the three do not pay tax.
Queried Chiphiko: “Why is it that Macra, Nocma and Mera do not pay tax yet they make a lot of cash? What is the problem and why is Treasury just looking at this?”
The legislators also wondered why there was laxity in terms of collecting tax revenue from parastatals such as Malawi Broadcasting Corporation (MBC) which it emerged owes the Malawi Revenue Authority (MRA) about K4.5 billion in tax arrears dating back to 2006.
But Botolo refused to elaborate on the issue, referring the matter to one of his directors responsible for taxation. He told the cluster that parastatals have their own way of paying taxes.
In response, Ministry of Finance director of revenue policy Chrispin Kulemeka, a former deputy commissioner general at MRA, told the MPs that the said parastatals—Macra, Mera and Nocma—are non-profit making organisations; hence, exempted from taxes.
He said: “The said organisations do not pay taxes because they don’t make profits. They are just regulatory authorities. Their duty is to collect levies and remit them to government. So, we cannot let them pay tax.” ne