MRA Extends Tax Stamp Regime to More Products Beyond Cigarettes
The Malawi Revenue Authority is working on extending tax stamps on products that attract excise tax beyond cigarettes beginning April 2024.
Head of corporate affairs for the authority Steve Kapoloma says other than maximizing tax collection, MRA anticipates tax stamps to help protect legitimate industries locally from unfair competition of smuggled and counterfeit products on the market.
“The additional products that will be bearing tax stamps include bottled water both pure and flavored, carbonated soft drinks, energy drinks, beer, wines, body lotion and glycerin” disclosed Kapoloma.
The move followed the 2021 amendment of Customs & Excise Act which broadened the Excise Tax stamps regime beyond cigarettes.
MRA has already engaged a company from Switzerland, SICPA which is present in 17 countries globally, including 8 in Africa for the supply of the stamps and monitoring implementation of the tax regime.
“In this country we have an influx of smuggled products, some of them are fake some are hazardous to humans and the environment but they find their way into the markets through unchartered routes. We want to curb that by introducing tax stamp” said Kapoloma.
Records show that traders mostly smuggle goods that are highly marketable, attract high tax value, restricted and prohibited goods such as alcoholic beverages, energy drinks, farm produce, groceries and cosmetics.
In the current fiscal year, the authority has already recorded 419 cases of smuggling from which duty amounting to K1.8 billion has been realized.
There are projections that the figure will be high by close of this fiscal year considering that smuggling cases continue to increase despite efforts to combat the malpractice.
“We are not relenting though in our efforts and strategies. One of which is the introduction of new Flexible Anti-Smuggling teams in eastern region covering Liwonde, Mangochi and Salima as well as the Central western region covering Mchinji, Kasungu and surrounding areas on top of existing FAST operations in the South, Central and Northern regions,” said Kapoloma.
In addition, to ensure that the authority relies less on human intervention, Kapoloma said use of technology such as drones and tax stamps is being encouraged to promote voluntary tax compliance.
Tanzania, Kenya, Uganda and Morocco are some of the countries in Africa where use of tax stamps has facilitated growth of revenue collected through excise duty since 2020.
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