The Malawi Revenue Authority-MRA has disclosed that the country is losing a fortune in tax revenue through smuggling.
Smuggling cases have been on the increase in the country, with the authority attributing the malpractice to porous borders and limited knowledge on the evils of smuggling among the locals.
Wilma Chalulu Corporate Affairs Manager for MRA told MIJ Online that from 2021 to 2023 the authority has rescued over K6 billion Kwacha of custom duty revenue from intercepted smuggled goods.
According to MRA figures, in 2021 the authority recorded 421 cases of smuggling and intercepted goods worth MK2,295,350,119.70 with duty amounting to MK1,704,490,620.81. In 2022 the authority recorded 440 cases and intercepted goods worth MK3, 493,441,514.77 whose duty was valued at MK2, 652,182,278.13
Meanwhile Chalulu disclosed that in the year 2023 alone MRA has already recorded 419 cases of smuggling and intercepted goods worth MK3,386,,517,533.20 whose duty is valued at MK1.8 billion.
“Smuggling continues to be a challenge in the country and over the years we have seen that although there have been measures being put in place there still remains unscrupulous people engaging in this vice.
There is technical smuggling where traders or importers connive with our officers of conceal some goods when crossing through the border and then there is pure smuggling where importers use uncharted routes to evade paying tax. As you can see these are huge sums of money that the nation could have lost, but who knows how much more we have already lost out there through goods that we have not been able to intercept,” said Chalulu
She however disclosed that the authority is implementing measures to cure the vice such as intensifying border patrol and the soon-to-be-introduced use of drones for patrol along Lake Malawi and other uncharted routes.
Meanwhile economic experts have described the situation as detrimental to the national economy.
Betchani Tcheleni-a professor of economics from the Malawi University of Business and Applied Sciences told MIJ Online that smuggling of goods undermines government tax revenues as it may remove formal business operators from formal system to join the informal non-tax paying system.
According to Tcheleni, this may in turn create unfair competition on the market hence calling for urgent action against the vice.
“Smuggling is a cancer to the economy of Malawi and it does not only involve imports but also export. If you smuggle it means you are not going to pay taxes yet when you get sick tomorrow you will need hospitals and well trained doctors who are there because of government revenue.
As you know government is currently over borrowing in terms of its expenditures because the Malawi Revenue Authority is struggling to raise the required amount for the budget, and when it borrows it clouds out private investments and borrowing for development. So smuggling is that bad,” explained Tcheleni