The Malawi Revenue Authority (MRA) has moved to recover K488 million from owners of 47 top-of-the-range vehicles seized for non-payment of tax in a joint operation with the Directorate of Road Traffic and Safety Services (DRTSS).
MRA head of corporate affairs Steve Kapoloma on Wednesday said the joint operation the two State agencies conducted in August 2018 has also exposed gaps in the coordination between tax and motor vehicle registration agencies.
He said the vehicles, mostly Toyota Fortuners, are owned by some car hire companies in the country which he did not disclose.
The discovery of a syndicate of car smugglers which has been fraudulently registering the vehicles without obtaining the customs clearance (CC) certification from MRA comes barely a month after the publuic tax collector announced the surpassing of its revenue collection targets for July and August by K11 billion.
Kapoloma, in a telephone interview on Wednesday, said: “Our spot checks found that there were a lot of vehicles that were registered without paying tax. That necessitated this joint operation which netted these 47 vehicles we seized. Our system was not beaten as some would like to believe.
“The cars were smuggled into the country and unfortunately, they were registered without being captured in our system. It is as if they do not exist at all.”
The development puts to question the viability and tenacity of the Malawi Traffic Information System (Maltis) which was touted as foolproof and having the ability to check fraud in the clearance and registration of motor vehicles.
Maltis was introduced in 2015 amid protests from some stakeholders who blamed it for being expensive and slow due to technical glitches such as network problems.
But while MRA officials pointed to DRTSS—the entity that has the legal mandate to carry out vehicle registration—the latter denied being the source of the loophole to which fraudsters are using to infiltrate the system.
In a written response on Wednesday, DRTSS spokesperson Angelina Makwecha put the blame on MRA saying her agency cannot perform vehicle registration without MRA’s hand.
“DRTSS has no mandate to introduce vehicles into the Maltis. The vehicles are introduced into our system by MRA as our systems are on interface with each other. The system only allows DRTSS to register vehicles that have been introduced or cleared in the system by MRA and this is done electronically.”
A post on the MRA website earlier read in part: “The joint operation involved patrols, surveillance, spot checks, compliance history and the use of informants. The MRA and DRTSS teams conducted patrols and surveillance on vehicles suspected to have been dubiously cleared or registered.”
It said of the 47 vehicles seized, nine were in Mzuzu, five in Blantyre, while a total of 13 were in the Eastern Region and 21 of them in the Central Region.
Calculations by MRA shows that the total assessed duty was K381 099 872.54 with an additional sum of K107 439 184.16 for penalties.
MRA said 35 of the vehicles were bought locally and were already registered with DRTSS but duty was not paid, adding there are many vehicles registered with DRTSS but they were not duly cleared.