Title: Two Businesspersons in Blantyre Arrested for Alleged Tax Fraud worth Over K625 Million

The Malawi Revenue Authority (MRA) made headlines on September 17, 2019, with the arrest of two businesspersons in Blantyre for suspected tax evasion offenses. The suspected fraudulent activities are estimated to have caused potential losses of over K625 million between April and September 2019.

Arrests and Discoveries

According to Steven Kapoloma, MRA’s Head of Corporate Affairs, the following individuals were taken into custody:

1. YuanChenggang, a sales representative of Herocean Enterprises, for selling iron sheets without collecting Value Added Tax (VAT).
2. Jiang Peng, a sales representative at United Manufacturing Company Limited, for selling motor vehicle batteries without charging VAT.

Upon investigating Herocean Enterprises’ premises, MRA officials reportedly discovered documents suggesting that VAT was not charged on certain sales, revealing a tax evasion of approximately K580.9 million. Similarly, at United Manufacturing Company Limited, the missing VAT revenue amounted to K45 million in the sale of motor vehicle batteries.

Contravention of Value Added Tax Act

Kapoloma further stated that both suspects had contravened the Value Added Tax Act by failing to charge and collect VAT on their sales as required. The arrests followed a tip-off from concerned locals, who claimed that Herocean Enterprises and United Manufacturing Company Limited had been selling iron sheets and motor vehicle batteries, respectively, without charging the mandated VAT.

Continued Investigations

Both suspects have been taken to Blantyre Police Station while the Authority continues its investigations. The MRA remains dedicated to preventing illegal tax practices and recovering lost revenues, emphasizing that tax evasion, regardless of scale, will not be tolerated.