The Malawi Revenue Authority (MRA) on Wednesday announced the introduction of a tax compliance tool called Electronic Fiscal Devices (EFDs).
During a press briefing held at Msonkho House, the Authority’s head office, MRA Commissioner of Domestic Taxes Nellie Jimu said the use of EFDs will among many benefits, increase tax compliance levels in the country.
She said the devices transmit all sales data to MRA’s server which will help the Authority easily assess the correct amount of Value Added Tax (VAT) and Income Tax.
“We are introducing EFDs following the enactment of the law in July 2011 to introduce and enforce the use of these devices. The EFDs are an advanced version of electronic cash registers that record all sales transactions at the point of sale. They have fiscalised memory which means data cannot be erased,” said Jimu.
The Commissioner said the machines produce fiscalised receipts containing data needed to assess tax while at the same time using GPRS/mobile network connectivity to transmit the data to MRA’s central server.
She then appealed to every member of the general public to demand a ‘Fiscal receipt’ generated by the EFDs.
“For the EFDs to work out perfectly, we would like to appeal to every member of the general public to demand a fiscal receipt for goods bought or services rendered from VAT operators. By demanding fiscal receipts, consumers will be assured that their VAT has indeed been recorded and accounted for,” Jimu said.
Some of the the features of a ‘Fiscal receipt’ will among others include, name and address of the operator, taxpayer identification number (TPIN) of the operator, an MRA logo, serial number of the device, total value of the sale, description of the goods or services, quantity, unit price, tax rate chargeable and amount of tax.
The Commissioner further said the EFDs are the advantageous to businesses since they have a stock management module to help operators manage their stock and that its data reliability will lessen tax audit disputes.
“For MRA this means increased tax compliance, improved taxpayer record management, reduced time taken to assess, audit and collect, reduced audit queries, objections and appeals,” said Jimu.
The Deputy Commissioner General, Crispin Kulemeka, made a presentation titled ‘Facts about VAT: What it is and how it works’ which reminded all VAT operators to visibly display their certificates and emphasized that anyone contravening the law on taxes will be apprehended and penalised accordingly.
Taking his turn, MRA’s Commissioner General John Biziwick, said introduction of the Electronic Fiscal Devices will play a significant role in improving efficiency and effectiveness in the administration of VAT, therefore increasing revenues that will better enable Government to improve delivery of social and economic services.
He said the Authority will always endeavour to find ways to enhance tax compliance, increase revenues and reduce cost of compliance by the taxpayers.
“We have appointed and certified qualified local distributors, from whom eligible VAT operators can procure EFD’s and also obtain all necessary services including installation, training, integration to your existing systems, maintenance and also secure after sales support. The authorised distributors are; Business Machines, Canotech Limited, Gestetner and Xerographics.
“The EFDs are available to buy from 6th March, 2014 and the roll out will be in phases. The initial phase begins from 6th March to 31st June 2014. This phase is targeting all VAT operators that are currently issuing manual receipts. These operators are also using ordinary cash registers,” said Biziwick.
The Commissioner General said all VAT operators that will procure, install and use the EFDs within the stipulated time frame will benefit from a Cost Recovery Scheme.
“What this means is that if they procure, install and commission their EFDs through an authorised local distributor, using their own finances, they will claim 100% cost of the device from MRA through subsequent VAT returns.
“There will be no cash refunds, but the Government will offset the cost incurred through VAT returns. The second point to note about the implementation of the EFDs is that this is mandatory. All VAT operators that do not have EFDs by the stated period will be punished in accordance with the law,” Biziwick said.
The Commissioner General further stressed that by demanding the ‘Fiscal receipt’ consumers will know that their tax will reach the final destination, businesses will have well managed records which means reduced cost of compliance and MRA will ensure that the correct amount of VAT is accounted for and collected, leading to low cost of tax administration.
Source: MRA

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