MRA clarifies duty-free incentives amid abuse concerns by some churches

Malawi Exclusive 

The Malawi Revenue Authority has clarified the tax incentives available to religious institutions, in a move seen as tightening controls amid concerns that some churches have been abusing the duty-free system.

In a public notice which MRA Commissioner General Counsel Felix Tambulasi , published on Wednesday, reminded faith bodies that the Customs and Excise law provides for duty waivers on specific items under Customs Procedure Codes 422 and 452, but warned that only qualifying institutions following prescribed procedures will benefit.

The clarification comes against a background where some churches have in the past been accused of abusing the facility — including importing buses and vehicles duty free and then diverting them for commercial use or resale, inflating quantities beyond institutional needs, and using proxy institutions to access multiple duty-free allocations.

According to the notice, religious institutions are allowed to import a bus with a seating capacity of 26 people or more duty free once every five years. Religious bodies that own at least five health institutions and those that own at least five educational institutions are each entitled to import two motor vehicles for transporting people duty free every five years.

The Authority said sacred materials including Bibles, Qur’ans and other religious audio materials, together with church requisites such as altars, fonts, lecterns, pulpits, vestments, bells, statuary, communion wafers and communion wine, also qualify for duty-free importation.

The window further covers operational equipment including computers, photocopiers, printers, musical instruments, pews, pianos, organs, keyboards, drums, guitars and public address systems, while building materials and commercial vehicles such as lorries, vans and pickups attract only VAT at 17.5 percent.

MRA said applicants must submit an application to the Commissioner General at Private Bag 247, Blantyre, clearly indicating the items intended, attaching invoices, packing lists, bills of lading and proof of registration from relevant ministries.

The Authority stressed it will be required to be satisfied that the goods are commensurate with the needs of the institution in terms of kind, value, weight and quantity, and that it may impose additional conditions to curb abuse.