a taxpayer can pay more tax than his tax liability and it is the obligation of
a tax administration to refund the excess tax. The newly-enacted Tax
Administration Act mandates the Malawi Revenue Authority (MRA) to process tax
refunds for taxpayers who have paid excess tax. A taxpayer should apply for a
tax refund in writing within three years of the relevant date for any tax type
but the period for claiming excess input Value Added Tax (VAT) is within 12
The frequency for claiming tax refunds is three months for any other
tax type but taxpayers can claim for VAT refunds every month. The Commissioner
General is required to make a decision on an application for a tax refund
within 60 days of receipt of the application. He may reject the application if
the applicant has not paid excess tax or make a refund if he is satisfied that
excess tax was paid.
The Commissioner General may request an applicant to
provide additional information as may be necessary to make a decision on the application.
However, if further information is not furnished, the Commissioner General shall
proceed to make a decision based on the available information. If additional
information is provided, he shall make a decision within 30 days of receiving
the information. If the Commissioner General is satisfied a taxpayer should get
a tax refund, he shall apply the excess to reduce any outstanding tax
liabilities and refund the balance to the applicant within 90 days.
However, if the Commissioner General fails to refund the excess tax within 90 days, he shall be liable to pay interest on the excess tax at the prevailing bank lending rate plus five percent per annum for each month or part thereof during which the excess tax remains unpaid. The Tax Administration Act requires the Commissioner General to maintain a separate bank account for tax refunds and ensure that there are sufficient funds at all times.
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