Malawi Revenue Authority (MRA) employees who colluded with some Non-Governmental Organisation (NGOs) officials managed to siphon money believed to be in several billions from the tax collector through fraudulent Value Added Tax (VAT) refund claims.
Various organisations received millions from the authority after claiming VAT refunds despite not initially paying VAT in the first place.
According to a published report by the Platform for Investigative Journalism (PIJ), some organisations such as NGOs are not required to pay VAT and are entitled to refunds whenever they pay.
However, NGOs which did not pay any VAT used fraudulent tax certificates to lie that they had paid VAT and claim refunds from the MRA.
“Under the guise of VAT exemption status, these organisations erroneously received millions in refunds,” PIJ reports.
Speaking to PIJ, MRA Corporate Affairs Manager Steven Kapoloma said investigations by MRA and fiscal police are underway and some suspects have been arrested for fraud and money laundering.
According to PIJ, those arrested include former Zomba-based Sammy Aaron who is accused of four counts of forgery, uttering false documents, obtaining money by false pretence, money laundering and theft related to a K709 million scam.
Aaron is facing the charges together with four accomplices who include Vincent Mtambalika, an accountant for Action Hope, businesswoman Tiwonge Nsonthi and Justin Bulaula, a former MRA employee.
Senior MRA officials including a manager at Lilongwe Division have also been implicated in the fraud and MRA has since suspended six officers.
