Chitipa South Constituency Member of Parliament Werani Chilenga and Human Rights Defenders Coalition (HRDC) have queried the Ministry of Finance for its continued use of a bank account used for depositing funds which Malawi Revenue Authority (MRA) collects as Processing Fees and Destination Inspection Fees.
The two have asked the Anti- Corruption Bureau (ACB) to investigate Ministry of Finance officials who continue depositing money into the said account instead of Malawi Government Account Number One.
According to Section 19 of the MRA Act, all revenue collected by, due and payable to the tax-collecting body is supposed to be paid into the Consolidated Fund, also known as Malawi Government Account Number One.
Chilenga, therefore, faulted Treasury for continuing to use an account that is not mentioned in tax collection law.
“The public need to know that the Ministry of Finance is still operating an account it was supposed to stop using a long time ago,” he said, adding that it was also important for the citizenry to know those who were serving as signatories to the said account.
According to the lawmaker, destination fees were introduced when the government had a contract with Societe Generale De Surveillance, a company which was hired to manage Destination Fees within MRA.
However, the contract expired sometime back.
“[This notwithstanding], the government is still using the said account. The government collects K15,000 for processing fees and K35,000 as Destination Inspection Fees. If we were to do calculations, you would see that the government has billions of Kwacha in this account.
“But, to our surprise, the money is not being accounted for; there are no audits for this account. This is something that raises eyebrows as to what the Ministry [of Finance] uses the money in the account for. We need a forensic audit into this dubious account and [findings should] be brought to Parliament,” Chilenga said.
HRDC Chairperson Gift Trapence concurred with Chilenga.
He said what was happening was disturbing.
“It is disturbing to learn that there is an account that has never been audited. The account has to be audited and the audit should start from the day it [the account] started operating.
“Malawians want to know the signatories to the account and how the funds have been used. If this will not be disclosed to taxpayers, HRDC will take these people to ACB and drag the government to court to release the information related to this mysterious account,” Trapence said.
Centre for Social Accountability and Transparency Executive Director Willy Kambwandira said the situation smacked of “fraud and high-level corruption”.
He added that maintaining the account contravened Public Finance Management Act provisions.
“The law should take its course and the ministry should account for the funds. It is bad for for ministry officials to be involved in such a practice,” he said.
Finance Minister Felix Mlusu acknowledged that the said money was not deposited into Account Number One.
He, however, said processing fees were not deposited into the Consolidated Fund because they were earmarked funds used for specific activities undertaken by MRA’s Customs and Excise Division.
“These activities are very critical and require a significant amount of money to be undertaken and they need to be taken quite urgently in most instances. It was, therefore, necessary to earmark these funds as they have been earmarked.
“The activities that are funded using the processing fees include protection of society from illegal entry of goods into the country, infrastructure development in border stations and paying rewards to informants that provide valuable information to customs officers on smuggling activities,” Mlusu said.
On Destination Inspection Fees, the Minister said they were introduced by MRA officials after the phasing out of pre-shipment inspection and valuation services, which were previously being provided by Societe Generale De Surveillance.
“These fees are, therefore, part of MRA income and do not form part of government revenue to be deposited into government Account Number One.
“A decision to treat these incomes as part of the consolidated fees would adversely affect the domestic revenue mobilisation drive as MRA would not be in a position to proactively deal with some of the ad-hoc challenges that would emerge in the course of collecting revenues,” Mlusu said.