MRA’s customs controlled warehouse for export to help reduce forex shortage

Malawi Revenue Authority (MRA) is set to reduce forex shortage in the country with a new amended law called ‘Customs Controlled Warehouse for Export’ which will enable people to export farm produce to other countries using structured markets.

MRA is implementing and sensitizing various stakeholders in the country on the newly amended law as it will control export smuggling through which exporters under-declare goods and the forex generated does not reach back to the country.

MRA’s taxpayer education manager, McHizzal Kawanga said the government recently made amendment which requires business people to export farm produce through customs controlled warehouse to deter export smuggling — thus the country earning more forex for its reserve.

“What we are doing as MRA is that Malawi as a country should realise foreign exchange from those sales,” he said. “That is why we are educating the general public and business people to make sure that they export in line with the law as the government will be generating a lot of forex.”

Kawanga added that MRA has initiated measures to counter smuggling by introducing more road blocks as part of inland inspection.

One of the participants, trader for Formula 1 Investments, Kenneth Gondwe applauded MRA for the amendment of the law, saying the process “will cut down on middlemen since exporters will be dealing directly with buyers and investors”.

Last Friday in Mangochi, MRA held an interface with Association of Business Journalists (ABJ) to appraise on its modernization reforms to, among others, widening the tax net; enhancing taxpayer service & education and integration of ICT systems.

To improve compliance, there will be withholding tax of 1% on agricultural produce; requirement for exports of all non-traditional agricultural produce to be exported from a customs controlled warehouses; introduction of specific tax on second hand vehicles and improve interagency collaboration on enforcement activities in fighting smuggling and other tax & financial crimes.

Another reform is the detachment of the Flexible Anti-smuggling Team (FAST) from the mainstream operations to concentrate on inland examination taking cognizance of increasing figures of porous borders. MRA is also in the final stages of procuring border surveillance drones.

In the 2022-2023 financial year, FAST has made seizures of smuggled goods and under-declared goods of over 473 in its mandate to deter smuggling; cross checking duty payable and goods declared; checking if import documents are authentic; preventing the importation of illegal and harmful products from penetrating into the local market or leaving the local market.

Currently, there are five FAST offices — Northern FAST; Central FAST; Southern FAST; FAST East and FAST West while 11 more MRA road blocks have been extended to it.

To widen the tax base, MRA targets to improve collection of rental income; commence collection of royalties from mining companies; to commence collection of PAYE from Malawians working in embassies and foreign missions; extend block management systems to other towns; implement tax stamps on selected products such as beer, wines, bottled water, spirits — and extend advance income tax to exports.

Challenges include hostile communities, lack of knowledge, porous borders, informants working for smugglers — and to combat them, MRA will be tracking movement cargo consignments through COMESA Virtual Trade Facilitation System for inward and through transit plan to extend to breadbulks and tankers.

Thus the increased roadblocks as well as enhancing its informant reward scheme currently under review.

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