Malawi Revenue Authority (MRA) on Thursday impounded about 213 bales of second-hand clothes suspected to have been bought without issuance of valid fiscal receipts and under-declaration of sales.

The seized bales were offloaded at MRA’s Ginnery Corner offices, where MRA head of corporate affairs Steve Kapoloma accused the bales’ owners of two violations. Firstly, upon interception in Limbe while in transit to Mangochi,  the owners of these bales did not pay value added tax [VAT] which means that the traders have not issued VAT on all the 213 bales that were intercepted. “They have paid VAT on some bales while some bales literally have no VAT paid” said Kapoloma, “We have seen that these bales in any ordinary market value would cost above K120 000 to K130 000 each, but the amount on the VAT receipts we have collected are far much below the market price which is K80 000 and K60 000.”

In other news, the Mid-Year Budget Review presented by former Minister of Finance Goodall Gondwe, showed that corporate tax underperformed during the first half of this fiscal year. Figures show that a 20.3% drop was registered, when compared to figures from the same period in 2018. According to the presentations by the minister, Treasury amassed K479 bn, which was lower than K456.7 bn collected last year.

The presentation also noted a drop in non-tax revenues which together will the tax underperformance, will affect Malawi’s economy in the rest of the fiscal year.