Government has amended the Customs and Excise Act to ensure that exporters are tax compliant.

From now onwards, goods for export will be kept in a customs controlled warehouses to enable government account for the exports.

The law has empowered the Malawi Revenue Authority (MRA) to request receipts for export proceeds from banks before processing VAT refunds.

Presenting the Bill 4 of 2023 Customs and Excise (amendment), Minister of Finance and Economic Affairs Sosten Gwengwe on Friday observed that many exporters were not tax compliant since they do not file an income tax return and pay appropriate income taxes.

The amendment, among others, seeks to expand the definition of duty to include advance income tax so that government can get a 10 percent income tax on all exports if the exporter is not registered with MRA for tax purposes.

The new measure will also enable government to collect the tax if the exporter does not have a tax clearance certificate

Gwengwe said: “So many of our exporters illicitly export our commodities but no forex is coming back into this country in one way or another. The exporters are either forging the export receipts or rounding tripping exports goods where by goods are taken outside and smuggle them back into the country.”

The minister also informed the House that the measure is meant to stop illegal activities that lead to loss of tax revenues, including keeping of proceeds offshore

Democratic Progressive Party (DPP) finance spokesperson Ralph Jooma, who is also Mangochi Monkey Bay legislator, stressed the need to include fitness of the applicant to be granted licences so that only qualified people do businesses.

He also observed that licences are for two years, saying the period is short considering the time that will be lost when goods are in warehouses.

On her part, United Democratic Front member Lilian Patel hailed government for the amendment, saying the country has for a long time been ripped off by exporters.

She argued that produce such as beans and soya continue to be exported but there is nothing to show for it.

Said Patel: “Something is wrong, because we sell our commodities but still it is said that the country is not exporting. A time has come for the country to reap where it has sown, not exporters reaping on our behalf.”

She, however, said the memorandum states that withholding tax is also applicable to farmers clubs which she described as unfair.

Meanwhile Chitipa South lawmaker Welani Chilenga has urged government to tighten the noose on illicit financial flows in the mining sector, saying the country is losing billions of kwacha every year.

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