Malawi Revenue Authority (MRA) has arrested five top officials of Mapeto David Whitehead and Sons for offences bordering on tax evasion.
Mapeto Director Faisal Gaffar Latif Sunday handed himself over to MRA officers in Blantyre, in the company of his lawyer Jai Banda.
The other four— Managing Director Mohamed Gaffar, Financial Controller Abdul Rashid Bakali, Procurement Manager Yaseen Muhamad and General Manager Martin Mpata—were arrested on Friday.
Banda, who is Faisal’s lawyer, declined to comment on the issue, saying he did not have instructions from his client to speak to journalists.
MRA spokesperson Steven Kapoloma said the Mapeto officials had been arrested in connection with three cases of tax evasion.
Kapoloma said the officials were being accused of smuggling and under-declaring goods, saying they declared finished raw materials as raw materials to pay less tax.
“They have also been under-declaring their sales and Paye (Pay as You Earn). They employed expatriates, paid them normal salaries but declared less to MRA,” he said.
Kapoloma said the five are being kept at Blantyre Police Station and would be taken to court soon.
The company also allegedly imported containers of brand new tyres but passed them off as used ones.
In April this year, MRA officials obtained a warrant to search Mapeto offices, saying they had been tipped about alleged crimes.
According to a sworn statement in support of the application of 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 tyres and bales of second-hand clothes.
“[I hereby make an oath to say] that the concealed fabrics have an estimated revenue recovery of K689,707,486 for the 5,300 bales and K20,393,904.89 for the Java wax in customs duties,” the sworn statement reads.
In total, MRA would have lost an estimated K710,101,390 minus revenue from the tyres and bales of the second-hand clothes to the alleged fraud.
According to the sworn statement, Mapeto imported a 20ft 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 says, on March 19 2021, MRA officials visited Mapeto premises to conduct a physical examination on offloading of the consignment as required by customs laws but were advised that offloading of the container would begin the following day on March 20 2021 and that they should come that day for the exercise.
The statement says MRA officials placed seals on the container securing it for the exercise scheduled for the following day.
“[I hereby make an oath to say] that on return to the premises the following day March 20 2021, the Feast [Flexible Anti-Smuggling Team] officers removed the seals and opened the container only to find that the goods had already been offloaded.
“The officers inquired as to what triggered the empty container [and] officials at Mapeto premises informed them that the goods had already been offloaded contrary to their undertaking the previous day to offload the goods in their presence. [The Mapeto officials also claimed] that the goods had already been offloaded at the time the seal was being placed,” the statement reads.