Religious bodies pledge to honour tax laws
Religious bodies that operate businesses have pledged to honour their tax obligations to the Government. The bodies made the pledge during an interface meeting organized by the Malawi Revenue Authority (MRA) in Blantyre on Tuesday, 26th September, 2017. The meeting was organized to explain and clarify taxation issues that affect the religious organizations in the country.
In her presentation, Taxpayer Services Manager, Nancy Mwale, said the tax law requires all ecclesiastical bodies to register for tax if they are operating profitable businesses. Taxes they can register for include Corporate tax, PAYE, VAT, FBT and Tevety levy, among others. She added that tax registration is free and can be done at any nearest MRA office.
In conformity with the law, Mwale said that income is subject to tax if it is derived from business activities like rentals from buildings, hiring out of halls, chairs, vehicles, buses, running private schools, clinics and lodges, among other businesses.
‘’But this excludes tithes, church offerings, pledges, zakat, incomes from fund raising activities, donations and other related incomes,’’ she emphasized, adding that the Taxation Act requires taxes to be charged on, levied on and paid by every Ecclesiastical body at the rate of 30 percent.
She went on to say that if the business was registered as a Company it is also liable to pay Dividend tax at 10 percent on distribution of dividends to shareholders.
Taking his turn, Taxpayer Services Officer, Charles Maleta, said that ecclesiastical bodies are among other beneficiaries who enjoy duty exemption under CPC 422 on imported goods like decorations, altars, fonts, lecterns, pulpits, plate, vestments, bells, statuary, communion wafers and communion wine for use for religious purposes in public worships, lorries, vans, pick-ups, computers, photocopiers, printers, keyboards and many more goods.
In their concluding remarks, the Deputy Commissioner for Domestic Taxes –Technical, Crosby Phiri and Head of Corporate Affairs, Steven Kapoloma reminded the faith community that the requirement for ecclesiastical bodies to register and pay tax when operating profitable business was not new and the meeting was intended to refresh their knowledge and information laws that affect them.
BY WADZA OTOMANI
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