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Smuggling, tax evasion worry industry body

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Malawi Confederation of Chambers of Commerce and Industry (MCCCI), an umbrella body for private sector players in the country, has lamented an influx of smuggled products into the country and a rise in cases of tax evasion among some importers.

The chamber says the vices are having a negative effect on businesses and the economy as the country is unable to generate enough revenue from the importers while prices of some commodities on the market are distorted.

MCCCI Council Member Lusubilo Chakaniza said smugglers “gain a competitive edge” over tax-compliant businesspersons as the former offer their commodities at relatively cheaper prices.

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Chakaniza was speaking on Friday in Mzuzu during the launch of the Taxpayer Charter by the Malawi Revenue Authority (MRA).

Chakaniza, who is also the Chief Executive Officer for Ethanol Company Limited, appealed to the tax collector to move swiftly and level the playing field.

“That is something that is hitting us hard as captains of the sector. That [smuggling] actually distorts the market in the sense that we do not gain a competitive advantage.

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“If you pay all your taxes correctly, you end up having higher prices. So we believe that if MRA comes in swiftly to moderate this and bring all of us to a level playing field, then it will make the market better,” she said.

MRA Commissioner General John Biziwick said the launch of the charter is a clear demonstration of MRA’s desire to provide excellent services to taxpayers.

Biziwick expressed hope that the charter would help the authority tame cases of smuggling.

He said mostly smuggled goods include liquor, motor vehicle spare parts and second-hand clothes.

“We have found that at times people have smuggled because they lacked information on whether the goods were dutiable or not. So sometimes people have tried to smuggle goods which in the first place should not have been smuggled; they are duty-free.

“So what we are trying to do is first educate the public on the need for them to pay taxes, but also in terms of how much they are supposed to pay. We are also engaged in several other initiatives aimed at minimising smuggling cases but at the end of the day the journey is not as simple as we need to do more,” he said.

Among other things, the charter stipulates the rights and obligations of taxpayers and contains standards for service committed to taxpayers and other stakeholders.

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