Stiff Penalties for Transacting without a TCC
Individuals, public institutions and private companies risk stiff penalties and imprisonment if they conclude transactions without a valid Taxpayer Clearance Certificate (TCC) following the amendment of the Taxation Act and the publication of the changes in the Government Gazette.
The Malawi Revenue Authority (MRA) held taxation workshops in Lilongwe, Mzuzu, Blantyre and Zomba in late March and early April 2017 to update accounts and procurement officers working in government ministries, departments, agencies and parastatals on the changes.
The amendment of Section 85A of the Taxation Act stipulates that any person who concludes or causes the conclusion of a transaction without a TCC shall be liable to a penalty imposed by the Commissioner General of five times the amount of tax prejudiced or K2 million, whichever is the greater.
Furthermore, the amendment stipulates that such a person would be liable to a fine of not less than ten times but not exceeding twenty times the amount of tax prejudiced or K10 million, whichever is greater and imprisonment for two years upon conviction.
Making her presentation at the taxation workshops, Taxpayer Services Manager Nancy Mwale said the transactions which require a TCC include renewal of Business Resident Permit, Permanent Resident Permit and Citizenship and Temporary Employment Permit.
“The renewal of professional business licenses and permits, a certificate of registration under the National Construction Industry Act, Certificate of Fitness for commercial vehicles/Public Transport and business license on Tourism, Mining, Energy and Telecommunication also require a TCC,” she said.
Mwale added that other transactions which require a TCC include the supply of goods and services to Malawi Government and its agencies, tenders and contracts, the transfer of shares or change of ownership, the transfer of land and buildings, the transfer of a company as a going concern, the externalization of funds and when expatriates are leaving the country.
Mwale said a TCC, which is a transaction-based written confirmation from MRA that a person’s tax affairs are in order at the date of issue of the certificate, indicates that an individual or corporation has no tax arrears due to Government.
“A TCC may be issued for all taxes or for a tax or taxes specified by the business. A TCC is issued to tax compliant persons who have registered for taxes with MRA, submitted returns that are due in all taxes, paid all the outstanding debts or have made arrangements to pay the outstanding debts and acquired the EFD machine and has no penalty in relation to the use of EFDs if registered for VAT,” she said.
The Taxpayer Services Manager said a valid TCC has an MRA logo, a serial number, a date of issue, an MRA Stamp, is signed by a Manager of the station and it can be validated by dialing *915# on TNM or by consulting the nearest Domestic Tax Office.
During the taxation workshops, participants were also briefed on the operation and administration of Withholding Tax, the applicable rates, the calculation of Withholding Tax and the conditions for accessing a Withholding Tax Exemption Certificate.
The MRA crew included Mwale, Taxpayer Services Officer, Charles Maleta, Media Specialist, Wadza Otomani and Public Relations Specialist, Hilda Mkandawire.
By Wadza Otomani
USD - 1751
GBP - 2264.33 
ZAR - 97.42 
EUR - 1944.21
CAD - 1280.63 
JPY - 11.39 
AUD - 1159.68
