Some local firms are not remitting Technical, Entrepreneurial and Vocational Education and Training (Tevet) levy collected by Malawi Revenue Authority (MRA).
Tevet levy, which is one percent of a company’s gross profit, is an employer’s contribution to be used for employees’ continuous professional development and is kept in a Tevet Fund.
Speaking in an interview on Tuesday in Blantyre on the sidelines of MRA Tevet levy meeting, the tax bull’s deputy director of corporate Affairs Steven Kapoloma said a lot of companies are not paying the Tevey levy based on data collected by the public tax collector and Tevet Authority (Teveta).
“The register which we have received from Tevet shows that there are less than 2 000 employers on Tevet levy, while in our books, we have over 10 000 taxpayers that are paying pay as you earn [Paye].
“So, these two do not match, which means there should be more on Tevet register than we have on the Paye because as you are aware, Paye is based on a threshold while Tevet levy has no threshold,” he said.
Kapoloma said MRA has since instituted mechanisms on bringing those companies to register and pay Tevet levy.
“We will continue to aggressively reach out to them through education and consultation and also make deliberate efforts to use the register that we have to ensure that they come on board.
“It is the responsibility of each and every employer to register. It is their obligation, they are required by law to register,” he said.
In his remarks, Teveta director of quality assurance Wilson Makulumiza- Nkhoma said initially, companies had a lot of reservations with the Tevet levy as they were not sure whether the money is going to be used for its intended purpose.
He said that it is important for companies to be remitting Tevet levy as it is critical for ensuring that companies have skilled labour force for the betterment of the economy.
MRA and Teveta signed a memorandum of understanding (MoU) in November 2015, mandating MRA to start collecting Tevet levy from employers nationwide as part of the public sector reform programme.
It was envisaged that with the coming in of MRA to start collecting Tevet levy, the revenue will rise by about 50 percent.
However, with resistance from some companies, MRA is consistently failing to meet the target.