The Public Accounts Committee of Malawi Parliament has endorsed the much awaited digital tax stamp which Malawi Revenue Authority (MRA) has rolled out.
The full usage of digital tax stamps is a tool to eliminate goods smuggling into the country.
PAC Chairperson Mark Botomani on Tuesday, August 5, 2024 support the implementation of the exercise in the capital Lilongwe after inspecting MRA Warehouse and unchartered routes that smugglers use.
Botomani said now that the committee has hands-on experience on how people smuggle goods into Malawi, there is no problem for MRA to use the tax stamps on products saying doing so could also be protecting other business people.
"After our inspecting today we have noticed that smuggling is a huge problem and the only solution to prevent it is by bringing different mechanisms like tax stamps. No country can run without taxes and MRA needs our support.
"Likely, the stamping issue has the potential to reduce smuggling and that's the only solution since the government is losing a lot of money through smuggling of goods. That's evading tax. MRA should continue sensitizing the public on the matter," said Botomani.
On his part, MRA's Commissioner General, John Bizwick said the goal behind digital tax stamps is to protect and safeguard local industries and consumers from unfair competition posed by illicit, smuggled, and counterfeit excisable products.
He said the idea also seeks to ensure that consumers are not exposed to unbranded and potentially hazardous imports, which could be detrimental to health.
"The local industry will be saved from unfair competition of smuggled products because only legitimate products will have the stamp, and only legitimate products will find their way onto the market.
"Because of smuggling, the market share of products that have been produced in Malawi has been impacted negatively. By bringing in tax stamps, local industry will be saved from the competition of smuggled products," he explained.
The stamp endorsement is coming just a day after another committee of industry, trade, and tourism led by Paul Nkhoma did the same on Monday after doing an inspection.
Tax stamps are stamped on products to show that the manufacturers have met tax obligations but also to show that the products are fit for human consumption.
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Meanwhile, on Wednesday, August 7, MRA) alongside a pressure group called Malawi First, People First and concerned business operators in the country passed a resolution to halt the planned demonstrations against tax stamps.
MRA head of corporate affairs director Steve Kapoloma told the news conference that the three institutions recognise that smuggling is a big challenge that undermines the interests of SMEs and public service delivery, as such, tax stamps should only be used to protect business and national interest.
MRA on Friday, May 10, 2024, launched the much-awaited Extended Excise Tax Stamps Regime (digital stamping) to bolster the tracking and tracing of excise tax payments.
The development followed the amendment of the Customs and Excise Act (2021).
The Excise Tax Stamps Regime was gazetted in January 2024 and has now been fully implemented as of May 1, 2024.
An enhanced excise tax stamp is a highly secure sticker or label affixed or printed directly using special ink on an excisable product.
Currently, Governments in Democratic Republic of Congo, Kenya, Morocco, Sierra Leone, Gambia, Tanzania, Togo, and Uganda are implementing digital tax stamps.
The extension of excise tax stamps in Malawi will widely assist in monitoring the supply chain of specified excisable goods, detect infiltrations by illicit flows, and protect local manufacturing industries from unfair competition that comes with counterfeits and smuggled products.
