The Malawi Revenue Authority (MRA) established the Large Taxpayer Officer (LTO) within the Domestic Taxes Division (DTD) in 2007. At that time, the Income Tax Division and the Value Added Tax were combined to form the DTD.
The establishment of the LTO followed a recommendation from the International Monetary Fund (IMF) in 2007 which encouraged the segmentation of taxpayers so that MRA could manage them better.
The LTO is organized on functional lines. The functions are audit, collection and return filing enforcement, return processing and payment, and taxpayer services. The LTO serves over 600 large taxpayers in Malawi.
There are several determinants for a taxpayer to be in LTO. These include taxpayers with an annual turn-over of equal to, or above, MK750 million; taxpayers whose payments are equal to, or above, MK200 million; taxpayers in the banking sector; taxpayers in the same economic grouping with total turnover, or tax payments, equal to or above MK750 million or MK200 million, respectively; all excise taxpayers; all taxpayers whose annual Value for Duty Purposes (VDP) as declared to Customs and Excise Division is equal to, or above, MK700 million; and all subsidiaries of taxpayers who meet the above set criteria.
The LTO has a Client Relationship Management (CRM) program designed to monitor service delivery to large taxpayers. The CRM program has been in operational since July 2015 and it is expected to be rolled out to all taxpayers in the near future.
CRM involves assigning specific desk officers to a particular taxpayer to provide advisory services to enhance tax compliance and ensure that all services required by the taxpayer are speedily attended to. These services include processing Tax Clearance Certificates (TCCs), Withholding Tax Exemption Certificates (WTECs) and attending to all enquiries by the taxpayer. Desk officers also periodically remind taxpayers on tax due dates and return submissions.
Desk officers are also responsible for monitoring compliance and checking taxpayer accounts to ensure accuracy. Any payment challenges on the part of the taxpayer should be brought to the attention of the desk officer to ensure that the taxpayer remains compliant and avoid enforcement.
CRM has proved to be effective since it was introduced as it has improved service delivery. The program has minimized compliance gaps and errors in returns. It has also helped in improving compliance relating to return submissions and payments.