MRA Seizes Castel Malawi Account

Malawi Revenue Authority MRA has seized Castel Malawi Limited account over tax.

In a memo addressed to all staff, managing director Herve Milhade says the company over the past years has struggled to maintain business profitability due to continued decline in sales volumes, turnover and heavy exercise tax rate.

“In 2013 MRA confirmed the calculation of exercise tax be based on 90 percent of production cost the rate which will adversely affect performance, cash flow and survival of the company,” Milhade said

He disclosed that on 13th June 2019 he met MRA commissioner general Tom Grey Malawi and commissioner of domestic taxes Nellie Jimu.

However their efforts have failed and MRA has issued a distrait notice against the company and garnished its accounts.

He emphasized that “those actions by MRA mean that Castel Malawi Limited is at risk of closure and the withdrawal from the country due to unrealistic and unaffordable exercise calculations.”

Commenting, economist Ben Kalua has warned that financial constraints which have rocked Castel Malawi ltd might affect future of other companies if the trend is left unchecked.

In his remarks, Kalua said “though government has responsibility to provide amenities to its people from money it generates from taxes, there is need to ensure survival of companies.”

Kalua has meanwhile advised government to moderate its expenditures so that it does not put pressure on local companies to meet its taxation needs.