Sosten Gwengwe says MRA made a mistake and that Parliament did not change vehicle tariff
By Cathy Maulidi
Government has bowed to pressure and has since rescinded its decision on the customs duty regime on used cars which the Malawi Revenue Authority (MRA) announced last week.
There has been an uproar over the past two weeks following the release of new and high import duty rates for the vehicles.
Announcing the decision yesterday after meeting used cars dealers in Lilongwe, Minister of Finance Sosten Gwengwe said the decision has been arrived at to give room for more views on the matter.
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This now means that people will be using the old duty regime when importing vehicles.
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“This document by [MRA] has been recalled, to give time. for a clean-up and because it’s a consultative matter, it will be done in a consultative manner with those involved so that a document that we will be using should be a document that is mutually agreeable and a document that everybody else should accept,” Gwengwe said
He said government will soon make a statement on the new decision.
According to Gwengwe, Parliament or the current budget has not revised a single tariff for motor vehicles, and the tariff used for motor vehicles is the same.
“So the notion that government has increased taxes is not based on what was presented in Parliament because we never increased any tariff in Parliament.
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“What has caused all this chaos is the manner in which the document has come up because all through, it is meant to be a consultative process and for some reason the valuation method used puts everything else on the wrong side without consultation with those involved,” he said.
Gwengwe added that government is aware that MRA is an authority but he said an issue of this magnitude needed consultation with all those that are concerned including the ministry of finance itself.
“But I would understand because the document we are talking about is 3,675 pages and for people to put it together you, would understand that indeed that errors were made. Wrong valuation was used and that shouldn’t have happened. It raised panic to everybody,” he further said.
Reacting to the development, a representative of the used cars dealers, Themba Mkandawire expressed excitement with the decision.
“We didn’t know who was behind the decision. We thought it was the ministry trying to put more pressure on Malawians and reap them off through huge taxes but through the explanation from the minister, we are happy to hear that it wasn’t their decision so we are happy with what has happened and today we shall have a peaceful sleep,” he said.
The car dealers lawyer, Alexis Kamangira also could not hide his excitement saying Malawians have won.
“Section 58 subsection 1 of the Malawi Constitution provides that Parliament can delegate power to make law to the executive or the judiciary but that process, once registration is done, has to be laid before Parliament which in this case did not happen. Whatever happened in this case could not stand before the law,” Kamangira said.
Human Rights Defenders Coalition (HRDC) that called for halting of the decision has, through its chairperson Gift Trapence, hailed the minister for rescinding the decision.
“We commend the Minister of Finance for listening to the concerns of Malawians. It is our expectation that going forward the process will be consultative and transparent. Malawians are ready to pay taxes that are fair and reasonable and justifiable,” Trapence.
MRA was part of the meeting but its Commissioner General wasn’t in attendance. MRA team was since led by Fred Mpeusa who is commissioner for customs and exercise.
Journalists wanted to hear MRA’s side on the story but the minister said they shouldn’t speak to the media.
