MRA engages local councils on ePayment

The Malawi Revenue Authority (MRA) has advised local government councils to migrate to ePayment, an online platform for payment of taxes.  

Deputy Commissioner Government Compliance Office (GCO) Janet Kholowa said this on Friday, 28 July 2023 in Salima where MRA engaged some selected local government councils on ePayment.

Kholowa expressed concern over low tax compliance levels among local government councils.

She highlighted a number of challenges such as multiple Taxpayer Identification Numbers (TINs) for some councils, non-submission of tax returns, and delays in tax payments.

“Every council should have only one TIN. Most local government councils are also not submitting tax returns. It is difficult to determine tax due without tax returns. Delays in payment of taxes result in refer to drawer cheques and penalties,” she said.

She said local councils need to make proper declarations of their income and should avoid concluding transactions without a Tax Clearance Certificate (TCC).

Taking his turn, Deputy Director Accounting Services Tiya Somba Banda said there had been rampant abuse of cheques and that was why MRA decided to discontinue their use in 2017.

He said the Authority introduced ePayment to provide an online platform for payment of taxes as an alternative to cheques.

“Most taxpayers, including the central government, have embraced ePayment for tax payments, but local government councils have been slow to adopt this payment method. Why should local councils continue using cheques?,” he wondered.

Somba Banda said MRA would like to assist local government councils to comply with tax laws and avoid incurring un-necessary costs through refer to drawer cheques which attract 30 percent penalty.

He said taxpayers owe MRA over K7 billion, with nearly K3 billion of that amount coming from local government councils due to refer to drawer cheques

“Its high time you migrated to ePayment. You are the only taxpayer who is not on ePayment,” he lamented.

The National Local Government Finance Council (NLGFC), the regulatory authority for government councils, stated that it would consult on the use of ePayment.

NLGFC representative Sara Chizinga said MRA should allow councils to continue using cheques before migrating to ePayment.

“We are proposing the piloting of ePayment at a few councils before implementing it across all councils. Lilongwe City Council has been proactive in using the platform and it could be a point of reference,” Chizinga said.

She urged councils to pay their taxes on time and ensure that their bank accounts have sufficient funds to avoid refer to drawer cheques.

The ePayment Training Workshop attracted officials from Chikwawa, Phalombe, Zomba, Lilongwe, Mchinji, Ntchisi and Chitipa district councils.  

 

BY WADZA OTOMANI