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Tax evasion scam

How Fam aided others to evade tax

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Alfred Gunda

Details have emerged that Football Association of Malawi (Fam) facilitated evasion of tax when importing materials for Mpira Stadium in 2019.

The association, which enjoys duty free privilege when importing sporting materials, sought an approval from Malawi Revenue Authority (MRA) to import 7,178 packages of bleachers and seats.

Fam got an approval on January 4, 2019 to import the items duty free.

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“We write to convey the Commissioner General’s approval to clear 7,178 packages of stadium bleachers and seats as per invoice number LV 20180406 of 4/05/2018 duty free in terms of Customs Procedure Code 435 of the Customs and Exercise (Tarrifs) order.

Kindly note that the procedure waives import duty only and that Import Vat at 16.5 percent will be payable,” part of the letter from Malawi Revenue Authority (MRA) reads.

According to documents, which Malawi News has seen, the association imported five containers which had stadium seats and bleachers.

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But four containers were full with items belonging to the association.

However, one container was consolidated with materials belonging to other people.

The container in question had 798 plastic stadium chairs and assorted items, including television sets, tiles and sofa sets.

It was discovered that the chairs, including the assorted items, came under Fam’s name despite belonging to other people.

The other items, including three sofa sets valued at $300, 500 pieces of wall tiles at $1,275 and 360 pieces of floor tiles amounting to $720.

The documents also include four pieces of Jacuzzi valued at $60, bed with two side beds valued at $56 and extensions worth $180.

In addition, the container also had two sets of led Television sets, one set of coffee table, two suitcases with clothes, one baby motorcycle, 412 pieces of wooden tiles boarder, 80 pieces of swimming pool tile, 206 pieces of wooden tiles, 42 pieces of tiles for bar, 137 balcony tiles, 96 floor tiles and two sets of lightings.

One piece of mattress, one set of steel door, bed set and radar are also some of the items included in the container.

The association’s General Secretary, Alfred Gunda insisted that Fam did not violate any taxation laws.

“All the materials that Fam ordered for the stadium project were duly declared and Fam never procured the other materials being mentioned. Fam received its materials in five container loads, four of which were entirely for Fam and one container was with consolidated items for Fam and other people,” Gunda said in a written response.

“Fam cleared the portion for the Association in the consolidated container and the other did their respective clearances.

Fam never evaded tax by consolidating in the shipping of a portion of the stadium materials. This practice of consolidating materials in shipping items from China is common practice and each individual or organisation takes responsibility of their consignment.”

However, Malawi News talked to two individuals who the association claimed owned some of the items.

One of them, who opted not to be named, confirmed that he had some items in the container and claimed he paid duty in full.

But the person refused to disclose the items.

The other one insisted on face to face interviews.

But MRA Head of Corporate Affairs, Steven Kapoloma was reluctant to disclose information of taxpayer.

“Due to taxpayer confidentiality, the authority will not be able to share the taxpayer’s information,” Kapoloma said in a written response.

Analyst George Kaudza- Masina said it was wrong for the association to abuse its privileges.

“What Fam did is a crime as it breached section 134 of the Customs and Exercise Act which is called under declaration of goods thus leading to tax evasion. Ordinarily, those people who used Fam privileges are supposed to have their goods seized and pay hundred percent of the duty in question,” Kaudza-Masina who also served as Acting Fam General Secretary said.

“For the same, a custodial sentence might befall those responsible who are Fam and the beneficiaries in question. All in all, the Commissioner General will have a final say on the way forward but this is a serious crime for denying government of its much needed financial resources and Fam as an institution could have done better.”

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