MRA loses K50bn to fraud yearly

Malawi Revenue Authority (MRA) director general John Bizwick says the tax collecting body loses about K50 billion to corruption and tax fraud every year.

He said this on Tuesday at Msonkho House in Blantyre after signing a memorandum of understanding (MoU) with the Anti-Corruption Bureau (ACB). 

Under the partnership, the two agencies will exchange knowledge in emerging areas related to intelligence gathering, forensic investigation and tax evasion.

They will also develop and implement joint education programmes and activities to curb corruption.

The MoU comes after a recent Afrobarometer study showed that two thirds of Malawians perceive corruption levels to have increased in the past year and find government’s commitment to fight the vice wanting.

The study also showed that people view Malawi Police Service as the most corrupt institution followed by MRA.

Bizwick said: “We are losing a lot to corruption and tax evasion. Sometimes when we uncover some fraudulent activities such as tax evasion, we find very alarming figures. As Malawi, we could be losing over K50 billion or K60 billion to corruption and fraud.

“We know we are also perceived to be the most corrupt in the country.”

He said the authority is sensitising its staff to the dangers of corruption

Said Bizwick: “We will also go into automation because what we have discovered is [that] some of the corruption [happens] because there is a lot of man intervention so this gives our staff a chance to engage in these practices.”

On her part, ACB director general Martha Chizuma said the partnership is expected to bring together the two bodies to protect tax revenue.

She said: “Corruption is indeed rampant and when you look at issues of corruption, most corruption happens at public procurement and this is the money that comes from taxes. 

“The MRA collects revenue that is supposed to be used for public services among others and the ACB is there to protect that revenue and ensure that that revenue is used for the intended purpose. We are, therefore, geared up in this fight such that anyone who tries to abuse this revenue is taken to task.”

Malawi climbed 19 places on the 2021 Transparency International Corruption Perception Index (CPI), according to rankings released in January this year.

Meanwhile, defaulting taxpayers have previously been recorded to owe the public purse through the MRA at least K1 trillion in cumulative unremitted taxes over a 10-year period, according to sources within the authority.