Firm probed over K701 million fraud claim
Malawi Revenue Authority (MRA) is investigating Mapeto David Whitehead and Sons Malawi on allegations of tax evasion and other tax fraud-related offences.
MRA spokesperson Steven Kapoloma confirmed the development, saying the tax collector obtained a search warrant to conduct the investigations.
“With the authority of a search warrant issued by the Resident Magistrate’s Court, [MRA] is undertaking investigations into the alleged importation of assorted goods, such as fabric and accessories, various types of tyres, and other goods in respect of which offences of tax evasion and tax fraud are suspected to have been committed…,” Kapoloma said in a written response.
According to a sworn statement in support of the application for the search warrant by MRA’s acting Deputy Director of Tax Investigations, Daniel Daka, the goods which Mapeto allegedly concealed include 246 bales of Java Wax fabric, 5,300 bales of mixed rolls of fabric, uncounted different types of tyres and bales of second hand clothes.
“[I hereby make oath to say] that the concealed fabrics have an estimated revenue recovery of K689,707,486.00 for the 5,300 bales and K20,393,904.89 for the Java wax in customs duties,” reads the sworn statement.
In total, MRA would have lost an estimated K710,101,390 minus revenue from the tyres and the bales of the second- hand clothes to the alleged fraud.
According to the sworn statement, Mapeto imported a 20 feet container Number CMAUO713109 under customs clearance declaration number BLA C3607 of March 18, 2021 containing finished fabrics but declared them to be raw materials (unbleached grey fabric) with intent to avoid paying relevant taxes.
The sworn statement further says on March 19, 2021, MRA officials visited Mapeto premises to conduct physical examination on offloading of the consignment as required by the customs laws but were advised that offloading of the container would begin the following day and that they should come that day for the exercise.
The statement says the MRA officials placed seals on the container securing it for the exercise scheduled for the following day.
Apparently, on return to the premises, MRA officers removed the seals and opened the container only to find that the goods had already been offloaded.
Mapeto General Manager, Martin Mpata, declined to comment on the matter, saying it is under investigation.
Human Rights Defenders Coalition (HRDC), which tipped MRA of this alleged tax fraud, has hailed the authority for commencing the investigations.
HRDC chairperson, Gift Trapence, said they would like to see everyone on the country complying with tax laws regardless of whatever connections they have.
“We will be following the matter to see how the investigations go,” Trapence said.