Minister of Information and Communications Technology Nicholas Dausi Tuesday told Parliament that Times Group owes the Malawi Revenue Authority (MRA) tax arrears amounting to K2.5 billion, but the media company has dismissed the claim as total lies.
Dausi was responding to a question from Lilongwe City South East lawmaker Ulemu Msungama who enquired what the policy says with regard to closure of media houses that owe MRA.
Msungama cited a case where Times Group was closed about two weeks ago “with heavily armed security officers because of an obligation” which has been under discussion for some time.
He said: “I am concerned because the media play a crucial role in disseminating information. Those that expose corruption are being silenced.”
But while arguing that the matter was in court and therefore could not be deliberated in Parliament, Dausi claimed the cumulative total of tax arrears that Times owes MRA is K2.5 billion.
“This is not about the closure of a media house. This is about the obligation to pay taxes. This House should implore all businesses operating in the country to pay taxes. But regarding this matter, it is in court and let’s wait for now,” Dausi said.
But in an interview later, Times Group legal counsel Innocent Kalua described the minister’s sentiments in Parliament as inaccurate.
According to Kalua, the media house’s current tax liability profile should be around K600 million including penalties for late payment.
“In November last year, MRA determined that we had a tax arrears of K261 million comprising K125 million as the actual tax debt and K136 million in penalties. They said we should pay up by December 6th and rejected our proposal for a structured settlement,” he said.
According to Kalua,Times Group instructed MRA to use its 2017 withholding tax credit of K200 million as a set off against the liability of K261 million thereby leaving a balance of K61 million only.
Kalua added that following Times Group’s self assessment in February this year, MRA determined that the company had arrears of about K700million accumulated mostly in the second half of 2017.
The K700 million tax liability comprised K535 million as the actual tax debt and K175 million in penalties for late payment.
“MRA insisted that we should pay this money within seven days. We could not pay such an amount of money in the period demanded and again proposed to pay the liability using our tax credits and in monthly instalments, but MRA yet again refused to accept our proposal,” Kalua said.
He also indicated that the penalties are choking Times Group.
“Without the penalties Times Group shouldn’t have had any liabilities by now. We are aware that MRA waives up to 80 percent of the penalties for taxpayers in circumstances similar to ours. We are also aware that MRA allows other taxpayers to settle their arrears by instalments. However MRA has consistently rejected Times Group’s proposals for settlement by instalments,” Kalua said.
When we followed up with Dausi to find out where he had got the information about what he told Parliament, he said: “At the moment, I have no comment.”
As of May last year public broadcaster MBC told Parliament it owes MRA K4.5 billion in tax arrears and asked the House to convince government to write off the debt.
MBC director of programmes Geoffrey Kazembe begged the MPs belonging to joint committees of Industry, Trade and Tourism as well as Media, Information and Communication to lobby the government to write off the debt.
“This will cripple us for years to come. Please lobby for us for MRA to relent a little bit on us. We are all in the same country called Malawi. We pray the government tells MRA to write off the debt,” Kazembe said.
MRA Commissioner General Thom Malata said his organization had engaged the Secretary to Treasury on the matter.
But MRA spokesperson revealed that MBC makes special arrangement with MRA to pay the debt in agreed instalments.
“The problem is that others rush to the courts. Our mandate is not to close down companies or institutions but to collect taxes. Therefore if there is a huge debt, let them come to us and make arrangements on how best they can repay it by instalments,” Kapoloma said.