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Retailers cheat buyers on VAT: CFTC steps in

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Some retailers in the country are said to be cheating consumers by quoting or tagging price without Value Added Tax on their shelves only to make them consumers pay a higher price with the tax.

The Competition and Fair Trading Commission (CFTC) has since warned the retailers that they risk prosecution for such malpractices as it is a violation of both the Consumers Protection Act and the VAT Act.

CFTC chief executive officer, Wezi Malonda, said consumers should report to the commission or other relevant authorities when they come across such experiences from any business person in the country.

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“We urge consumers to tip us or report the traders engaging in the malpractices,” she said.

Malonda said such cases just show that some traders in the country are engaging in unfair trading practices and in the process abusing consumers.

She says the Consumer Protection Act stipulates that the price to be displayed on goods is supposed to include the actual price as well as any duty, tax, charge, fees or levy the consumer is liable to pay.

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Registered VAT operators are required by law to issue a receipt, cash sale or invoice to the customer from the Electronic Fiscal Device (EFD) when taxable items have been supplied.

According to the Malawi Revenue Authority, EFD machines are programmed to calculate VAT and MRA last year started enforcing VAT Act sections on Electronic Fiscal Devices regulations.

The EFD requirement makes it mandatory for every VAT operator to issue electronically generated fiscal receipts.

The VAT Act stipulates that any person who violates any obligation as a user or local supplier under the EFDs regulations shall be liable to a penalty imposed by the Commissioner General of K500, 000.

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