Business and Finance

MRA hits back at BAM, says VAT statement misleading

The Malawi Revenue Authority (MRA) says there is no banking service in the country that attracts Value Added Tax (VAT) by law.

MRA Deputy Commissioner General, Henry Ngutwa said this Thursday afternoon during a media briefing in Blantyre.

According to Ngutwa, the statement by Bankers Association of Malawi (BAM) is misleading and misinformation “that needs to be corrected” as only non-banking services are subject to VAT.

Ngutwa (middle): BAM statement is misleading

He also said the tax has always been there and NBS Bank has already been remitting the 16.5 percent to MRA.

The MRA Deputy Commissioner also said BAM simply wants the banks to continue making supernormal profits.

BAM has issued a statement indicating that effective November 1, 2021, banks will impose a 16.5% VAT on some banking services.

Some of the non-banking services that attract VAT, according to the Amended VAT Act of 2021, are credit card late payment fees, interchange fees between a bank and other financial institutions, charges for cash handling such as counting and fees for processing credit or debit card payment transactions, including gateway fees.

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