CHAPTER 42:02
VALUE ADDED TAX

ARRANGEMENT OF SECTIONS

   SECTION

PART I
PRELIMINARY

   1.   Short title

   2.   Interpretation

   3.   Application of this Act to partnerships

   4.   Application of this Act to unincorporated organizations

   5.   Application of this Act to groups of companies

   6.   Application of this Act to Government agencies

PART II
IMPOSITION OF VALUE ADDED TAX

   7.   Imposition of Value Added Tax

   8.   Persons liable to pay Value Added Tax

   9.   Rate of Value Added Tax

PART III
TAXABLE PERSON

   10.   Taxable person

   11.   Registration as taxable person

   11A.   Use of information technology

   11B.   Registration as user of Value Added Tax computerized system

   11C.   Cancellation of registration

   11D.   Supply, operation and service of electronic fiscal devices

   12.   Register and particulars of taxable persons

   13.   Change in business

   14.   Cancellation of registration

PART IV
SUPPLY OF GOODS AND SERVICES

   15.   Supply of goods

   16.   Supply of services

   17.   Mixed supplies

   18.   Supply by agent

PART V
TAXABLE SUPPLIES

   19.   Taxable supply

   20.   Exempt supply

   21.   Zero-rated supply

   22.   Exempt import

   23.   Relief supply

PART VI
TIME AND PLACE OF SUPPLY

   24.   Time of supply

   25.   Issue of an electronic fiscal device generated tax invoice or a tax invoice

   26.   Place of supply

PART VII
TAXABLE VALUE

   27.   Value of taxable supply

   28.   Taxable value for determining Value Added Tax on imported goods

   29.   Adjustments

PART VIII
DEDUCTION OF INPUT TAX AND REFUNDS

   30.   Credit for deductible input tax

   31.   Refund or credit of excess tax paid

   32.   Deductible tax for mixed taxable and exempt supply

   33.   Time for payment of refund

PART IX
TAX RETURNS, RECORDS AND ASSESSMENT

   34.   Submission of tax return and date of payment of Value Added Tax

   35.   Records to be kept for purposes of Value Added Tax

   36.   Assessment of Value Added Tax and correction of return

PART X
RECOVERY OF DUE VALUE ADDED TAX, INTEREST AND OTHER LIABILITIES

   37.   Recovery of Value Added Tax due

   38.   Payment of interest on outstanding Value Added Tax

   39.   Garnishment

   40.   Distraint for liability

   41.   Recovery in respect of a person under liquidation

   42.   Payment of Value Added Tax into Consolidated Fund

PART XI
APPEALS

   43.   Appeal to decision of an officer other than the Commissioner General

   44.   Appeal to court

PART XII
OFFENCES AND PENALTIES

   45.   Failure to register

   45A.   Unlawful use of Value Added Tax computerized system

   45B.   Falsification, damage or impairment of record or information

   46.   Failure to issue tax invoice

   46A.   Failure to use electronic fiscal device

   46B.   Fraudulent use of electronic fiscal device

   46C.   Tampering with electronic fiscal device and software

   46D.   Failure to comply with any obligation as a user or supplier

   46E.   Failure to demand for keep a fiscal receipt

   46F.   General offence

   47.   False or misleading statement

   48.   Falsification and alteration of documents

   49.   Evasion of Value Added Tax payment

   50.   Failure to maintain proper records

   51.   Obstruction etc., of officer of the Authority

   51A.   Obstruction, etc., of a customer

   52.   Offences relating to officers

   53.   Protection of officers

   54.   Relationship of the Authority and other public services

   55.   Taking of samples

   56.   Power of inspection and warrants

   57.   Power to seal off premises

   58.   Provision of information

   59.   Penalty for unauthorized collection of Value Added Tax

   60.   General penalty

   61.   Compounding of offences

PART XIII
MISCELLANEOUS PROVISIONS

   62.   Evidence in proceedings

   63.   Regulations

   64.   Directives and other powers of the Commissioner General

   65.   Consequential amendments and savings

   66.   Repeal and savings

      First Schedule—Exempt Supplies

      Second Schedule—Zero-rated Supplies

      Third Schedule—Relief Supplies

      Fourth Schedule—Apportionment of Input Tax

      Fifth Schedule—Warrant of Distress relating to or incidental to Value Added Tax

7 of 2005
11 of 2006
6 of 2007
10 of 2008
15 of 2009
30 of 2010
23 of 2011
7 of 2012
18 of 2012
20 of 2013
12 of 2014
10 of 2015
G.N. 12/2006

An Act to provide for trhe imposition and collection of Value Added Tax; and to provide for matters relating to or incidental to Value Added Tax

[12TH AUGUST, 2005 ]

PART I
PRELIMINARY

1.   Short title

   This Act may be cited as the Value Added Tax Act.

2.   Interpretation

    In this Act, unless the context otherwise requires—

   “appropriation to own use”, in relation to goods, means applying the goods to personal use, including personal use by a relative or any other non-business use;

   “Authority” means the Malawi Revenue Authority established under section 3 of the Malawi Revenue Authority Act;

   “bank lending rate” means the rate of interest which the Reserve Bank of Malawi charges interest on its loans to commercial banks;

   “betting” means risking money or other property in forecasting the outcome of some event;

   “business” means the carrying on of any form of commercial activity, by a corporate body, individual, partnership or any organization;

   “Commissioner General” means the Commissioner General of the Malawi Revenue Authority appointed under section 17 of the Malawi Revenue Authority Act;

   “consideration”, in relation to a supply of goods or services, means the total amount in money or kind paid or payable for the supply by any person, directly or indirectly, including any duties, levies, fees and charges paid or payable on, or by reason of, the supply, other than Value Added Tax, reduced by any discounts or rebates allowed and accounted for at the time of the supply;

   “customer” means a person that buys goods or services from a business;

   “exempt import” means goods to which section 22 applies;

   “exempt supply” means a supply of goods or services to which section 20 applies;

   “finance lease”, in relation to goods, includes the lease of goods where—

   (a)   the lease term exceeds seventy-five per cent of the expected life of the goods;

   (b)   the lessee has an option to purchase the goods for a fixed or determinable price at the expiration of the lease;

   (c)   the estimated residual value of the goods to the lessor at the expiration of the lease term, including the period of any option to renew, is less than twenty per cent of its fair market value at the commencement of the lease;

   “gaming” has the same meaning as ascribed to that term in the Gaming Act;

   “gaming machine” has the same meaning as ascribed to that term in the Gaming Act;

   “goods” includes all kinds of moveable and immoveable property, thermal and electrical energy, heating, gas, refrigeration, air conditioning and water, but does not include money;

   “hire purchase agreement” means an agreement that is a hire purchase agreement within the meaning of the Hire Purchase Act;

   “importer”, in relation to import of goods, includes the person who owns the goods or any other person who is for the time being in possession of, or beneficially interested in, the goods;

   “input tax” means tax payable by a taxable person in respect of taxable received goods and services or imports;

   “lotteries” means a scheme whereby the right is purchased to take part in a draw by lot for a prize;

   “officer” means any member of the staff of the Authority performing duties under this Act and regulations made under this Act or delegated to him by the Commissioner General or any senior officer of the Authority or any other person appointed or authorized by an officer to perform any official duty connected with Value Added Tax; and includes an officer performing any duty under this Act on behalf of the Commissioner General;

   “relative”, in relation to an individual, includes an ancestor of the individual, a descendant of the individual’s grandparents, or the spouse of the individual;

   “rental agreement” means any agreement for the letting of goods other than a hire-purchase agreement or finance lease;

   “return” means a return of Value Added Tax due, or claim for Value Added Tax return;

   “tax invoice” means a fiscal receipt or invoice generated by electronic fiscal device upon supply of taxable goods or services in accordance with this Act and regulations made under this Act;

   “taxable person” means a person registered under section 11, and includes an individual, partnership, group of persons, company or corporation registered by the Commissioner General under that section;

   “tax period” means one calendar month;

   “taxable transaction” means a taxable supply or an import of goods or services that is subject to Value Added Tax under this Act;

   “user” means a person who is owner or employee who is required to use electronic fiscal device and includes the persons registered under this Act.

3.   Application of this Act to partnerships

   (1) Where a firm consisting of two or more individuals in partnership is a registered supplier, the firm shall be taken for the purposes of this Act, to be the supplier of any goods and services supplied in the course of the business of the firm; but in default of such registration, each partner shall be deemed to be the supplier of any such goods and services.

   (2) Without prejudice to any other written law providing for the sufficiency of any means of giving notice to a partnership, any notice of assessment or other notice given under this Act to a partnership may be addressed to the partnership in the name under which it is registered under this Act.

   (3) Subject to this section, in determining for the purposes of this Act whether any goods or services are supplied to, or by, a partnership, no account shall be taken of any change in the partnership.

   (4) Without prejudice to any written law providing for the imposition of liability of members of a partnership, until the date on which a change in the partnership is notified to the Commissioner General, a person who has ceased to be a member of a partnership shall be regarded as continuing to be a partner for the purposes of this Act and, in particular, for the purpose of any liability for Value Added Tax or interest due from the partnership under this Act—

   (a)   arising within or in connexion with the tax period during which he or she so ceased to be a member of the partnership; or

   (b)   arising within or in connexion with any earlier tax period during which, or during any part of which, he or she was for the purposes of this Act a member of the partnership.

   (5) Where a person ceases, for the purposes of this Act, to be a member of a partnership, any notice of assessment or other notice given to the partnership under this Act that relates to any matter—

   (a)   arising within or in connexion with the tax period during which he or she so ceased to be a member of the partnership; or

   (b)   arising within or in connexion with any earlier tax period during which, or during any part of which, he or she was for the purposes of this Act a member of the partnership,

shall be deemed to have been served on him or her.

4.   Application of this Act to unincorporated organizations

   (1) Where a club, association or other unincorporated organization is a registered supplier, the organization shall be taken, for the purposes of this Act, to be the supplier of any goods and services supplied in the course of the business of the organization; but in default of such registration, the management of the organization shall be deemed to be the supplier of such goods and services.

   (2) The names and other particulars of the members of the management of an unincorporated organization that is a registered supplier shall be recorded in the register, and such members shall bear the liabilities of the organization under this Act.

   (3) Until the date on which a change in the management of an unincorporated organization is notified to the Commissioner General, a person who has ceased to be a member of the management of an unincorporated organization that is a registered supplier shall be regarded as continuing to be such a member for the purposes of this Act and, in particular, for the purposes of any liability for Value Added Tax or interest due from the organization under this Act—

   (a)   arising within or in connexion with the tax period during which he or she so ceased to be a member of the management; or

   (b)   arising within or in connexion with any earlier tax period during which, or during any part of which, he or she was for the purposes of this Act a member of the management.

   (4) Where a person ceases, for the purposes of this Act, to be a member of the management of an unincorporated organization that is a registered supplier, any notice of assessment or other notice given to the organization under this Act that relates to any matter—

   (a)   arising within or in connexion with the tax period during which he or she so ceased to be a member of the management; or

   (b)   arising within or in connexion with any earlier tax period during which, or during any part of which, he or she was for the purposes of this Act a member of the management,

shall be deemed to have been served on him or her.

   (5) Where a person is a member of the management of an unincorporated organization during part only of a tax period, his or her liability for Value Added Tax on the supply by the organization of goods or services during that period, and any liability for payment of any interest or additional Value Added Tax as a consequence, shall be limited to such proposition of the organization’s liability as may be just in the circumstances.

5.   Application of this Act to groups of companies

   (1) For the purposes of this Act, two or more companies incorporated in Malawi are eligible to be treated as a recognized group if—

   (a)   one of them controls each of the others;

   (b)   one person, whether a company or an individual, controls them all; or

   (c)   two or more individuals carrying on a business in partnership control them all.

   (2) On application made by a company naming itself and other companies in the application, or by the person or persons controlling the companies named in the application, the Commissioner General, if satisfied that the companies named in the application are eligible to be treated as a recognized group, may by notice in writing—

   (a)   declare that, as from a date specified in the notice, the companies shall form a recognized group for the purposes of this Act; and

   (b)   designate the representative member for the group.

   (3) Where two or more companies form a recognized group, then, for the purposes of this Act, any business carried on by a member of the group shall be regarded as carried on by the representative member, and—

   (a)   any supply of goods or services by a member of the group to another member of the group shall be disregarded;

   (b)   any other supply of goods or services by or to a member of the group shall be regarded as a supply by or to the representative member; and

   (c)   any Value Added Tax paid or payable by a member of the group on the importation of any goods shall be regarded as paid or payable by the representative member, by whom the goods shall be deemed to have been imported.

   (4) Notwithstanding subsection (3), all members of a recognized group shall be jointly and severally liable for any Value Added Tax due from the representative member.

   (5) The Commissioner General may, on application made on behalf of a recognized group by notice declare that, as from a date specified in the notice—

   (a)   a further eligible company shall be included in the group;

   (b)   a specified member of the group shall be excluded from the group; or

   (c)   another member of the group shall be substituted as representative member; or

   (d)   the group shall no longer be a recognized group for the purposes of this Act.

   (6) An application under this section shall not be refused unless the Commissioner General considers it necessary to refuse the application for the purposes of the protection of the revenue.

   (7) The Commissioner General may, of his or her own motion, by notice exclude from membership of a recognized group any company which has ceased to be a member.

   (8) For the purposes of this section—

   (a)   one company shall be taken to control another if it is empowered by any written law to control the other’s activities or if it is the other’s holding company within the meaning of the Companies Act; and

   (b)   one or more individuals shall be taken to control a company if, apart from being an individual, he or she or they satisfy the criteria for being its holding company under the Companies Act.

6.   Application of this Act to Government agencies

   (1) Except to the extent to which provision is otherwise made by or under this Act, this Act applies to a Government agency as though a supply of goods or services to it for the purposes of the performance of its official functions were a supply of goods or services for the purposes of a business carried on by it.

   (2) The Minister may by Order published in the Gazette, provide for the modification of any provision of this Act, or of any regulation or rule made under this Act, in its application to a Government agency.

PART II
IMPOSITION OF VALUE ADDED TAX

7.   Imposition of Value Added Tax

   (1) There is hereby imposed a tax to be known as value added tax (in this Act otherwise called “Value Added Tax”) which shall in accordance with this Act be charged on—

   (a)   every supply of goods and services made in Malawi;

   (b)   every importation of goods; and

   (c)   the supply of any imported service, other than exempt goods and services.

   (2) Unless otherwise provided in this Act, Value Added Tax shall be charged on supply of goods and services where the supply is taxable supply and made by a taxable person in the course of his or her business.

   (3) Value Added Tax shall be charged and payable on the importation of goods and for that purpose any written law applicable to collection of customs duties and other taxes on importation of goods shall apply with such modifications as are necessary.

8.   Persons liable to pay Value Added Tax

   Except as otherwise provided in this Act, Value Added Tax shall be paid—

   (a)   in the case of a taxable supply, by the taxable person making the supply;

   (b)   in the case of imported goods, by the importer; and

   (c)   in the case of imported services, by the receiver of the services.

9.   Rate of Value Added Tax

   Except as otherwise provided in this Act, the rate of Value Added Tax shall be 16.5 per cent, calculated on the value of the taxable supply of the goods, services or import.

PART III
TAXABLE PERSON

10.   Taxable person

   (1) A taxable person is a person registered under section 11.

   (2) The Commissioner General shall notify a taxable person when registered and shall issue a certificate of registration, in the prescribed form, which shall be exhibited at the principal place of business of the taxable person.

   (3) The effective date of registration as a taxable person shall be such date as shall be specified in the certificate of registration issued by the Commissioner General.

11.   Registration as taxable person

   (1) A person is registrable as a taxable person if he or she is a person who makes taxable supply of goods or services and, whose business turnover is, or exceeds, K10,000,000 per annum.

   (2) The Minister may, by order published in the Gazette, revise the threshold amount specified in subsection (1).

   (3) For purposes of determining the threshold amount under subsection (1), separate businesses under the same ownership may be treated as owned by one person.

   (4) Any person who qualifies as a taxable person, or has grounds to believe that he or she will qualify as a taxable person, shall apply on such form as shall be prescribed for registration by the Commissioner General.

   (5) A person who is not registered, but who is liable to apply to be registered under this Act, is a taxable person from the beginning of the tax period immediately following the period in which the duty to apply for registration arose.

   (6) An applicant shall make the application for registration under this Act within thirty days of becoming qualified and upon acquisition of an electronic fiscal device or having reason to believe that he or she will so qualify.

   (7) The Commissioner General may by notice in writing notify any person that the person has within a tax period specified in the notice made taxable supplies—

   (a)   in excess of the turnover figure; or

   (b)   below the turnover figure, specified in subsection (1), and is registrable as a taxable person or not registrable, and shall act accordingly by registering or cancelling the registration of a taxable person, as the case may be.

   (8) Any national, regional, local or other authority or body which carries on any business activity which make it registrable as a taxable person shall apply for registration.

   (9) A group of taxable persons may, with the approval of the Commissioner General be treated for the purposes of Value Added Tax as one designated taxable person:

   Provided each member of the group undertakes to be jointly and severally liable for any contravention under this Act and regulations made under it.

   (10) A taxable person whose business is structured into distinct divisions may apply to the Commissioner General for each division to be registered for Value Added Tax.

   (11) Notwithstanding any provision of this section—

   (a)   any business with a turnover below the registrable threshold amount provided in subsection (1) may apply voluntarily to be registered by the Commissioner General; and

   (b)   the Commissioner General may by notice in writing notify the proprietor and register any class or category of businesses specified in the notice as registrable under this Act.

   (12) The Commissioner General shall register a person who qualifies under subsection (11) as a taxable person unless the Commissioner General—

   (a)   is satisfied that the person has no fixed place of abode or business; or

   (b)   has reasonable ground to believe that the person—

      (i)   will not keep proper accounting records relating to any business activity carried on by that person; or

      (ii)   will not submit regular and reliable returns as required by or under this Act; or

      (iii)   is not a fit and proper person to be registered.

11A.   Use of information technology

   (1) Subject to such conditions as the Commissioner General may prescribe, Value Added Tax formalities or procedures may be carried out by use of information technology.

   (2) For purposes of subsection (1), the Commissioner General may, by notice published in the Gazette, specify—

   (a)   the tax formalities or procedures; and

   (b)   the persons authorized to carry out such formalities or procedures.

11B.   Registration as user of Value Added Tax computerized system

   (1) A person who wishes to be registered as a user of a Value Added Tax computerized system may apply, in writing, to the Commissioner General for computerized registration, and the Commissioner General may—

   (a)   grant the application, subject to such conditions as he may deem necessary; or

   (b)   reject the application.

   (2) A person shall not access, transmit or receive information from a Value Added Tax computerized system unless that person is a registered user of the system.

11C.   Cancellation of registration

   The Commissioner General may cancel the registration of a user of a Value Added Tax computerized system, or impose a penalty on the user, if the Commissioner General is satisfied that the user has—

   (a)   failed to comply with any condition of registration imposed by the Commissioner General under
section 11B;

   (b)   failed to comply with, or has acted in contravention of, any condition under the Value Added Tax (Electronic Fiscal Devices) Regulations; or

   (c)   been convicted of an offence under this Act relating to improper access to, or interference with, a Value Added Tax computerized system.

11D   Supply, operation and service of electronic fiscal devices

   (1) The Minister may, on the advice of the Authority, make regulations providing for the supply, operation and service of electronic fiscal devices.

   (2) The Authority may, on application, issue a licence for the supply, operation and service of electronic fiscal devices.

   (3) The Authority may issue any of the following types of electronic fiscal device licences-

   (a)   a Local Distributor's or Supplier's licence; or

   (b)   a Manufacturer's license.

   (4) The Authority may only issue a single licence at a particular time.

   (5) The Authority shall publish a list of approved electronic fiscal devices which may be supplied under any of the types of licences referred to in subsection (3).

12.   Register and particulars of taxable persons

   The Commissioner General shall keep a register in the prescribed form in which shall be recorded the particulars of every taxable person.

13.   Change in business

   (1) Every taxable person shall notify the Commissioner General in writing—

   (a)   if the business ceases to operate or is sold; or

   (b)   if there is a change in the location of the business; or

   (c)   if there is material change in the ownership of the business; or

   (d)   of any change—

      (i)   in the name or address of that person; or

      (ii)   in circumstances which makes that person no longer qualified for registration as a taxable person; or

      (iii)   of a material nature in the business activities or in the nature of taxable supplies being made.

   (2) Where a taxable person dies or becomes bankrupt or incapacitated, the Commissioner General may, from the date on which the taxable person died or became bankrupt or incapacitated treat as a taxable person any person carrying on that business until some other person is registered in respect of the taxable supplies made or intended to be made by that taxable person in the course of his business, and the provisions of this Act shall apply to the person so treated as though he were a registered person; and any person carrying on such business shall inform the Commissioner General in writing of the fact and the date of the death or bankruptcy, or of the nature of the incapacity and the date on which it began, as the case may be.

   (3) A notification under subsection (1) shall be made within thirty days of the cessation, sale, change of location, change in the business, or ownership or any other change, as the case may be.

14.   Cancellation of registration

   (1) The registration of a taxable person shall be cancelled by the Commissioner General where the Commissioner General is satisfied that the registered person no longer exists.

   (2) A taxable person shall, within thirty days of ceasing to carry on business in relation to which a registration is made, apply in writing for the cancellation of the registration.

   (3) Any cancellation under this section shall take effect from the end of the tax period in which the registration is cancelled.

   (4) A taxable person whose registration has been cancelled under this section shall be regarded as having made a taxable supply of all goods on hand (including capital goods) and the person shall be liable for output tax, at the time the registration is cancelled on all goods in respect of which he or she received input tax credit under section 30; the output tax payable being based on the open market value of the goods at the time his or her registration was cancelled.

   (5) The obligations and liabilities of a person under this Act and regulations made under this Act, including the submission of returns required under section 34, in respect of anything done or omitted to be done by that person while a taxable person shall not be affected by cancellation of the registration of that person.

   (6) The Commissioner General shall serve a notice in writing on a person of the decision to cancel or refuse to cancel any registration under this Part within thirty days of the making of the decision or of receipt of the application, as the case may be.

PART IV
SUPPLY OF GOODS AND SERVICES

15.   Supply of goods

   Subject to this Act and regulations made under this Act, a supply of goods means any arrangement under which the owner of the goods parts with or will part with possession of the goods, including provision of goods by sale, barter, lease, transfer, exchange, gift or similar disposition, and appropriation to own use.

16.   Supply of services

   Subject to this Act and regulations made under this Act, supply of services means any supply which is not a supply of goods or money and includes—

   (a)   the performance of services for another person;

   (b)   the making available of any facility or advantage; or

   (c)   tolerating any situation or refraining from the doing of any activity.

   (2) A supply of services made by an employee to his or her employer by reason of the employment is not a supply made by the employee.

17.   Mixed supplies

   (1) A supply of services incidental to the supply of goods is part of the supply of goods.

   (2) A supply of goods incidental to the supply of services is part of the supply of services.

   (3) A supply of services incidental to the import of goods is part of the import of the goods.

18.   Supply by agent

   A supply of goods or services made by a person as agent for another person who is the principal is a supply by the principal:

   Provided that where a supply of goods or services is made by an agent, on behalf of a principal who is resident outside Malawi, the supply of goods for services shall be deemed to be made by the agent.

PART V
TAXABLE SUPPLIES

19.   Taxable supply

   (1) Except as otherwise provided in this Act or regulations made under this Act, a taxable supply is a supply of goods or services made by a taxable person for consideration in the course of, or as apart of his or her business activities and includes—

   (a)   the processing of data or supply of information or similar service;

   (b)   the supply of staff;

   (c)   the making of gifts or loans of goods;

   (d)   the leasing or letting of goods on hire;

   (e)   the appropriation of goods for personal use or consumption by the taxable person or by any other person;

   (f)   the sale, transfer, assignment, or licensing of patents, copyrights, trade marks, computer software, and other proprietary information; and

   (g)   exports.

   (2) A supply is made as part of the business activities of a person if the supply is made by him or her as part of or incidental to any economic activity he or she conducts.

   (3) Where a person produces goods by processing or treating the goods of another person, the supply of the goods shall be regarded as supply of goods.

   (4) The supply of any form of power, heat, refrigeration or ventilation shall be regarded as supply of goods.

   (5) A supply is made for consideration, if the supplier, directly or indirectly, receives payment wholly or partly in money or in kind from the person supplied or any other person.

20.   Exempt supply

   The supply of the goods and services specified in the First Schedule is exempt supply and not subject to Value Added Tax.

21.   Zero-rated supply

   Output tax shall be at zero on the supply of the goods and services specified in the Second Schedule.

22.   Exempt import

   An import of goods is an exempt import if the goods are exempted under the First Schedule and classified in conformity with the Harmonized Commodity Description and Coding System also known as “the Harmonized System”.

23.   Relief supply

   There shall be relief from Value Added Tax on taxable supply to the individuals, organizations and businesses specified in the Third Schedule.

PART VI
TIME AND PLACE OF SUPPLY

24.   Time of supply

   (1) Except otherwise provided in this Act or regulations made under this Act, a supply of goods or services occurs—

   (a)   where the goods or services are appropriated to own use, on the date on which the goods or services are first applied to own use;

   (b)   where the goods or services are supplied by way of gift, on the date on which ownership in the goods passes or the performance of the services is completed, as the case may be;

   (c)   in any other case, the earliest of the date on which—

      (i)   the goods are removed from the premises, or from other premises of the taxable person where the goods are under the control of the taxable person; or

      (ii)   the goods are made available to the person to whom they are supplied; or

      (iii)   the services are supplied or rendered; or

      (iv)   payment is received for all or part of the supply; or

      (v)   a tax invoice is issued.

   (2) Where supplies are made on a continuous basis or by metered supplies, the time of supply shall be the determination of the supply or the first meter reading following the introduction of Value Added Tax and subsequently at the time of each determination or meter reading.

   (3) The supply of goods under a hire purchase agreement or finance lease occurs on the date the goods are made available under the hire purchase agreement or lease finance, as the case may be.

   (4) Where—

   (a)   goods are supplied under a rental agreement; or

   (b)   goods or services are supplied under an agreement or written law which provides for periodic payment, the goods or services shall be treated as successively supplied for successive parts of the period of the agreement or as determined by that law, and each successive supply occurs on the earlier of the date on which payment is due or received.

   (5) For the purposes of this section, where two or more payments are made or are to be made for a supply of goods or services, other than a supply to which subsection (3) or (4) applies, each payment shall be regarded as made for a separate supply to the extent of the amount of the payment on the earlier of the date the payment is due or received.

   (6) Where the supply of goods or services is ancillary to another supply, the time of supply of the ancillary supply shall be deemed to be the same as the time of supply for the main goods or services.

25.   Issue of an electronic fiscal device generated tax invoice or a tax invoice

   (1) Subject to section 11A, every taxable person shall, on making taxable supply of goods or services, issue to the customer or the person supplied, an electronic fiscal device generated tax invoice or a tax invoice.

   (2) Every taxable person shall, upon issuing of the electronic fiscal device generated tax invoice, retain a copy of the electronic fiscal device generated tax invoice in a serial number order.

   (3) Notwithstanding the provisions of subsection (1), the Commissioner General may—

   (a)   on application by a registered person; and

   (b)   if he is satisfied that owing to the nature of a business, it is impracticable for the registered person to issue an electronic fiscal device generated tax invoice,

allow the registered person to account for Value Added Tax in such other manner as the Commissioner General may authorize.

   (3) Notwithstanding subsection (1), the Commissioner General may, on application in writing by a taxable person, allow the person to issue an invoice other than a tax invoice where, owing to the nature of the business or malfunctioning of the electronic fiscal device as may be certified by the approved technician, or loss of the device, it is impracticable for the person to issue a tax invoice.

26.   Place of supply

   (1) The place of supply of goods shall be the place from which the goods are supplied.

   (2) Unless otherwise provided in regulations made under this Act, the place of supply of a service shall be the place of business of the supplier or the place from which the service is supplied or rendered.

PART VII
TAXABLE VALUE

27.   Value of taxable supply

   (1) The value of a taxable supply is—

   (a)   where the supply is for money consideration, the amount of the consideration with the addition of all duties and taxes but excluding Value Added Tax;

   (b)   where the supply is not for money consideration or is only partly for money consideration, the open market value of similar supply excluding Value Added Tax.

   (2) For the purposes of subsection (1) “similar supply” in relation to a taxable supply, means a supply that is identical to or closely or substantially resembles the taxable supply, having regard to the characteristics, quality, quantity supplied, functional component, reputation of, and materials comprising the goods or services which are the subject of the taxable supply.

   (3) For the purposes of this Act, the open market value of supply of goods or services is the value determined under subsection (1) (a), if the supplier, purchaser or any other person concerned in the transaction were completely independent of each other and did not in any way influence the transaction.

   (4) Where the open market value of a taxable supply cannot be determined under subsection (3), the open market value of the supply shall be the amount that, having regard to all the circumstances of the supply, in the opinion of the Commissioner General, is the fair market value of the supply.

   (5) The taxable value of—

   (a)   a taxable supply of goods under a hire purchase agreement or finance lease;

   (b)   a taxable supply of goods by way of an application to own use;

   (c)   a taxable supply for reduced consideration; or

   (d)   a taxable supply described in section 14 (4), is the open market value of the goods or services at the time the supply is made, excluding, in the case of a hire purchase agreement or finance lease, any interest or finance charges.

   (6) Where a taxable supply is made without a separate amount of the consideration being identified as a payment of Value Added Tax, the taxable value of that supply shall be the amount of the consideration paid excluding Value Added Tax.

28.   Taxable value for determining Value Added Tax on imported goods

   The value for determining the tax chargeable on taxable imports shall be the import value calculated in accordance with the Customs and Excise Act with the addition of all import duties and taxes, but excluding Value Added Tax.

29.   Adjustments

   (1) This section shall apply where, in relation to a taxable supply by a taxable person—

   (a)   the supply is cancelled; or

   (b)   the nature of the supply has been fundamentally varied or altered; or

   (c)   the previously agreed consideration for the supply has been altered by agreement with the recipient of the supply, whether due to an offer of a discount or for any other reason; or

   (d)   the goods or services or part thereof have been returned to the supplier.

   (2) Where the taxable person making the supply—

   (a)   in giving a tax invoice in relation to the supply, has shown an incorrect amount on the invoice as Value Added Tax charged on the supply because of the occurrence of any one or more of the events mentioned in subsection (1); or

   (b)   has filed a return for the period in which the supply occurred and has accounted for an incorrect amount of output tax on that supply because of the occurrence of any one or more of the events mentioned in subsection (1), the taxable person making the supply shall make an adjustment in accordance with subsections (3) and (4).

   (3) Where the output tax properly chargeable in respect of the supply exceeds the output tax actually accounted for by the taxable person making the supply, the amount of the excess shall be regarded as Value Added Tax charged by the person in relation to a taxable supply made in the tax period in which the events referred to in subsections (1) and (2) occurred.

   (4) Subject to subsection (6), where the output tax actually accounted for exceeds the output tax properly chargeable in relation to that supply, the taxable person making the supply shall be allowed a credit for the amount of the excess in the tax period in which the events referred to in subsections (1) and (2) occurred.

   (5) The credit allowed under subsection (4) shall for the purpose of this Act be treated as a reduction of output tax.

   (6) No credit shall be allowed under subsection (4) where the supply has been made to a person who is not a taxable person, unless the amount of the excess Value Added Tax has been repaid by the taxable person to the recipient, whether in cash or as a credit against any amount owed to the taxable person by the recipient.

PART VIII
DEDUCTION OF INPUT TAX AND REFUNDS

30.   Credit for deductible input tax

   (1) At the end of the tax period, a taxable person may deduct from the output tax deductible due for the period, Value Added Tax on goods and services purchased in Malawi or goods and services imported by him or her and used wholly, exclusively and necessarily in the course of his or her business:

   Provided that—

   (a)   the supply is a taxable supply;

   (b)   in respect of purchases made in Malawi, the taxable person is in possession of a tax invoice issued in accordance with section 25; and

   (c)   in respect of importation or removal of goods from bonded warehouse, the taxable person is in possession of the relevant customs entries indicating that Value Added Tax was paid.

   (2) Value Added Tax deducted from the output tax under subsection (1) shall be known as input tax.

   (3) No input tax deduction shall be made on purchases or imports in respect of exempt supplies by the taxable person.

   (4) No input tax deduction shall be taken more than once nor shall it be taken after the expiration of a period of twelve months from the date the deduction accrued.

   (5) A taxable person does not qualify for input tax deduction in respect of taxable supply or import of motor vehicles or motor vehicle spare parts unless the taxable person is in the business of dealing in or hiring of motor vehicles or selling motor vehicle spare parts; but motor vehicles and motor vehicle spare parts used wholly, exclusively and necessarily for the business shall qualify for input tax deduction.

   (6) A taxable person does not qualify for input tax deduction in respect of taxable supply in respect of entertainment, including restaurant, meals and hotel expenses, unless the taxable person is in the business of providing entertainment.

   (7) Where a taxable supply to, or an import of goods by, a taxable person is partly for business use and partly for personal or other use, the amount of input tax allowed as a credit shall be restricted to that part of the supply that relates to the business use.

   (8) If goods for which a credit has been allowed under this Act cease to be applied to taxable transactions before the end of their life, the goods shall be treated as sold for the open market value at the time of the cessation.

   (9) In the case of a taxable person who regularly resells used goods purchased from consumers, the Commissioner General may determine the procedures for allowing such person input tax credit.

   (10) The Minister may, by Order published in the Gazette, prescribe other classes, types or description of goods and services on which input tax is non-deductible.

31.   Refund or credit of excess tax paid

   (1) Where the amount of input tax which is deductible exceeds the amount of output tax due in respect of the accounting period, the excess amount shall be credited by the Commissioner General to the taxable person:

   Provided that—

   (a)   in the case of exports, the Commissioner General may refund the excess credit to the taxable person where his or her exports exceed 70 per cent of the total supplies within the accounting period; and

   (b)   a refund shall be made by the Commissioner General to the taxable person where the excess credit remains outstanding for a continuous period of three months or more.

   (2) A taxable person who is registered from a specified effective date and who has in stock on the effective date goods on which Value Added Tax has been paid may claim credit or refund of Value Added Tax in such form as shall be prescribed:

   Provided that—

   (a)   the supply or import occurred not more than four months prior to the date of his or her registration; or

   (b)   in the case of capital goods, the goods have been held for a period not exceeding six months from the date of his or her registration.

   (3) For the purpose of this section, a completed refund or credit claim form, in the prescribed form, together with the relevant tax invoices or, in the case of imported goods the relevant customs document for Value Added Tax paid, shall be submitted to the Commissioner General by the taxable person.

   (4) Where the Commissioner General subsequently rejects the claim under subsection (2), any Value Added Tax previously treated as a credit or a refund shall be recovered by the Commissioner General in accordance with this Act.

   (5) Where a taxable person has issued a tax invoice and has paid the appropriate tax for a supply, and—

   (a)   the purchaser becomes insolvent; or

   (b)   the purchaser fails to pay all or part of the taxable amount of the supply in addition to the tax imposed and the debt is a bad debt proved to be such to the satisfaction of the Commissioner General,

the taxable person shall be allowed to take as credit the portion of the tax paid or imposed on the supply which is attributable to the debt that becomes irrecoverable.

   (6) Where a debt previously written off as a bad debt and for which credit has been given is later recovered, the tax due on amount recovered shall be paid to the Commissioner General in the tax period in which the recovery has been made.

32.   Deductible tax for mixed taxable and exempt supply

   (1) A taxable person who makes both taxable and exempt supplies may deduct the input tax on the taxable purchases and imports which are directly attributed only to the taxable supplies made.

   (2) Where a taxable person has made both taxable and exempt supplies, but cannot directly attribute the input tax to the taxable and exempt supplies under subsection (1), he or she may deduct as input tax an amount that bears the same ratio as the taxable supplies bear to the total supplies, applying the apportionment formula specified in the Fourth Schedule.

   (3) Where the fraction in subsections (1) and (2) is less than 5 per cent, the taxable person may not take credit for any input tax for the tax period.

   (4) Where, in applying the formula referred to in subsection (2), the fraction under subsections (1) and (2) is less than 5 per cent, the taxable person may not take credit or any input tax for the tax period.

   (5) Where in applying the formula under subsections (1) and (2) the fraction is more than 95 per cent, the taxable person may take credit for all input tax for the tax period.

   (6) The Commissioner General may approve or direct alter-native methods of apportioning input tax where he or she considers that the methods described in this section will result in an unreasonable calculation of the input tax which may be deducted.

   (7) [Deleted by 18 of 2012.]

33.   Time for payment of refund

   (1) Subject to subsection (2), where a taxable person is entitled to a refund of Value Added Tax under this Act, the refund shall be paid by the Commissioner General on an application by the taxable person within thirty days of receipt of the application.

   (2) No refund shall be made pursuant to subsection (1) to a taxable person unless—

   (a)   all previous returns by the taxable person have been submitted by the due dates and no Value Added Tax for any period is outstanding; and

   (b)   Value Added Tax, penalties and interest from the previous tax period have been paid by the taxable person by the due dates.

   (3) Where the conditions specified in subsection (2) have not been fulfilled, the Commissioner General shall reject the claim for refund and shall inform the applicant accordingly in writing within thirty days of receipt of the application.

PART IX
TAX RETURNS, RECORDS AND ASSESSMENT

34.   Submission of tax return and date of payment of Value Added Tax

   (1) Unless otherwise directed in writing by the Commissioner General, a taxable person shall account for Value Added Tax each calendar month on a return.

   (2) The return shall be in the prescribed form and shall state—

   (a)   the amount of Value Added Tax payable for the tax period;

   (b)   the amount of input tax credit or refund claimed; and

   (c)   such other matters as may be prescribed.

   (3) In addition to any return required under subsection (2), the Commissioner General may require any person, whether a taxable person or not, to submit, whether on that person’s own behalf or as agent or trustee of another person, to the Commissioner General such further or other return in the prescribed form as and when required by the Commissioner General for the purposes of this Act.

   (4) A return shall be submitted to the Commissioner General not later than the twenty-fifth day of the month immediately following the month to which the return relates.

   (5) Upon application in writing by a taxable person, the Commissioner General may, where good cause is shown by the taxable person, extend the period in which a return is to be submitted.

   (6) The payment of Value Added Tax due in the tax period shall be made to the Commissioner General not later than the twenty-fifth day of the month immediately following the tax period to which the return relates.

   (7) A taxable person directed to make his or her return other than in accordance with subsection (4) shall be informed of the date by which the return and payment shall be made to the Commissioner General.

   (8) A taxable person who, without lawful excuse or justification, fails to submit to the Commissioner General his or her return on the due date shall be liable to a pecuniary penalty of K20,000 and a further penalty of K1,000 for each day that the return is not submitted.

   (9) Any refer to drawer cheque for payment of Value Added Tax shall attract a penalty of 30% of the value of the cheque, regardless of the reason for the bank dishounoring the cheque.

35.   Records to be kept for purposes of Value Added Tax

   (1) Every taxable person shall—

   (a)   keep such records and books of accounts as the Minister may prescribe or as the Commissioner General may direct; and

   (b)   produce such records and books of accounts at such place and time as the Commissioner General may by general notice publish in the Gazette, any newspaper in general circulation, or in writing to taxable person, require.

   (2) In respect of the records to be kept under subsection (1), a taxable person shall not destroy any book, document, account or record which is less than six years old without the written permission of the Commissioner General.

   (3) Any permission granted by the Commissioner General under subsection (2) shall specify the book, document, account or records to which the permission relates.

36.   Assessment of Value Added Tax and correction of return

   (1) Where a taxable person fails to submit a tax return by the date required under section 34 or the Commissioner General has grounds to believe that a return is incorrect or that any due Value Added Tax has not been paid, the Commissioner General—

   (a)   may based on any information available to him or her assess Value Added Tax due; and

   (b)   shall notify his or her assessment in writing to the taxable person stating that Value Added Tax shall be paid within twenty-one days of the date, of the notice:

   Provided that the Commissioner General shall not raise an assessment after a period of six years after the Value Added Tax was due and payable unless fraud is a material element of the assessment.

   (2) Where a taxable person notified of Value Added Tax assessment under subsection (1) provides information which the Commissioner General accepts as justifying the withdrawal or amendment of the assessment, the Commissioner General may withdraw or amend the assessment.

   (3) Any Value Added Tax payable pursuant to an amended assessment under subsection (2) shall be paid within fourteen days of the date of the amendment.

   (4) A taxable person who is not satisfied with the return submitted by him or her may apply in writing to the Commissioner General to make any addition or alteration to the return; and any such application shall—

   (a)   state in detail the grounds, supported by documentary evidence, upon which the application is made; and

   (b)   be submitted not more than three months after the submission of the original return.

PART X
RECOVERY OF DUE VALUE ADDED TAX, INTEREST AND OTHER LIABILITIES

37.   Recovery of Value Added Tax due

   (1) Any Value Added Tax due under this Act, and any penalty and interest which remains unpaid after the due date under this Act, or under any other written law in respect of Value Added Tax, may be recovered by the Commissioner General as a debt.

   (2) Any amount shown on an invoice as Value Added Tax on a supply of goods or services shall be recoverable as Value Added Tax due from the person issuing the invoice, whether or not—

   (a)   the invoice is a tax invoice issued under this Act or in accordance with regulations made under this Act; or

   (b)   an amount of Value Added Tax is chargeable on the supply; or

   (c)   the person issuing the invoice is a taxable person.

   (3) Where any body, corporate or unincorporated, liable for the payment of Value Added Tax, or of any penalties or interest arising under this Act, defaults in payment, in whole or in part, after written demand, the directors, partners, and the person in control of the body, shall be jointly and severally liable to pay the sum due.

38.   Payment of interest on outstanding Value Added Tax

   (1) A taxable person who fails to pay any Value Added Tax payable by the due date shall be charged interest on the unpaid amount of tax at the bank lending rate prevailing plus five percent per annum:

   Provided that the Commissioner may reduce the amount of such additional sums if a satisfactory explanation for the delay is made.

   (2) Any interest charged under this section and any penalty payable that remains unpaid shall be recoverable as a civil debt by the Commissioner General.

39.   Garnishment

   Where any Value Added Tax, penalty or interest is due and payable from a taxable person, the Commissioner General may order—

   (a)   any individual or business from whom any money is due or is accruing or may become due to the taxable person; or

   (b)   any individual or business who holds or who may subsequently hold money for or on account of the taxable person, to pay the Commissioner General that money, or so much of it as is sufficient to discharge the Value Added Tax, interest or penalty due and payable.

   (c)   the Commissioner General shall, in respect of an individual or a business that fails to comply with paragraph (b), have the same remedies as he has against the property of any other person who is liable to pay Value Added Tax;

   (d)   for purposes of paragraphs (b) and (c), the Commissioner General may require any person to give him information in respect of any money, funds, or other assets which may be held by that person for, or on account of, the taxable person.

40.   Distraint for liability

   (1) The Commissioner General may in writing authorize the levying of distress in accordance with this section.

   (2) Where any Value Added Tax, penalty or interest due under this Act remains unpaid after the time by which this Act requires it to be paid, the Commissioner General may in writing and with notice to the taxable person authorize the levying of distress—

   (a)   upon the goods, chattels and effects of the taxable person; and

   (b)   upon—

      (i)   all assets, property, building, factory, machinery, plant, tools, means of transport and communication, accessories, animals, and all goods used in Malawi in the manufacture, production, sale or distribution of any taxable supplies;

      (ii)   any commodity or items found in any premises or any land owned by or in use or in possession of the taxable person or of any person on his or her behalf or in trust for him or her.

   (3) The written authority of the Commissioner General to distrain under this Act shall be a warrant as in Form A set out in the Fifth Schedule, and shall be the authority to levy by distress the amount of any Value Added Tax, penalty or interest due.

   (4) The distress warrant so taken shall be executed on only the assets of the taxable person and the Authority shall take possession of the properties specified in subsection (2) exclusive of all liabilities.

   (5) For the purpose of levying the distress, any person authorized in writing by the Commissioner General may execute the warrant of distress on the goods and assets of the taxable person specified under subsection (2) wherever the property may be and where necessary break open any building or place in the day-time for the purpose.

   (6) Any authorized person who executes a warrant of distress under this section may call to his or her assistance any police officer, and it shall be the duty of the police officer when required to assist in the execution of the warrant of distress and in levying the distress to do so.

   (7) The distress taken under this section may at the cost of the taxable person, be kept for fourteen days, and if the amount due in respect of Value Added Tax, interest or penalty and the cost and charges of and incidental to the distress are not then paid, the property distrained may be sold.

   (8) There shall be paid out of the proceeds of the sale, under subsection (7), first the costs or charges of the distress and incidental to the sale and keeping of the distress, next the amount due in respect of Value Added Tax, interest and penalty, and the residue, if any, shall be paid to the owner of the property; and any payment to the owner shall be made subject to the prior interest of the Authority which shall have precedence over all other interests.

   (9) Where any property seized in the execution of the distress warrant under this section is under a mortgage, charged by way of security for any debt, or is in any way encumbered, the sale of the property shall be made subject to the prior interest of the Authority which shall have precedence over all other interests.

41.   Recovery in respect of a person under liquidation

   (1) Where any tax, penalty or interest is due from a taxable or other person who is subject to liquidation or bankruptcy proceedings, the liquidator, receiver, or other person responsible for winding up the affairs of the debtor shall not distribute any assets until full payment has been made of Value Added Tax, penalty or interest due under this Act.

   (2) For the purpose of this section, the Commissioner General shall be deemed to be a creditor for purposes of the Companies Act.

42.   Payment of Value Added Tax into Consolidated Fund

   (1) All Value Added Tax, interest and penalties collected under this Act shall be paid into the Consolidated Fund.

   (2) Notwithstanding subsection (1), the Minister may set aside a percentage of Value Added Tax, interest and penalties collected under this Act in an account designated as “Value Added Tax Refund Account” out of which refunds due under this Act proven overpayment of Value Added Tax, payment made by non-taxable persons and payments made on non taxable supply may be refunded.

PART XI
APPEALS

43.   Appeal to decision of an officer other than the Commissioner General

   (1) A person who is dissatisfied with any decision of an officer of the Authority other than the Commissioner General, may lodge an appeal with the Commissioner General within thirty days after notice of the decision has been served on him or her or upon his or her becoming aware of the decision.

   (2) The Commissioner General may for good cause, accept an appeal lodged out of the time stipulated under subsection (1).

   (3) Every appeal under subsection (1) shall be in writing, and shall specify in detail the grounds, supported by relevant documents, upon which it is made.

   (4) The Commissioner General shall make a decision on an appeal within thirty days after receipt of the appeal and, where necessary, after interviewing the objector.

44.   Appeal to court

   (1) A person dissatisfied with the decision of the Commissioner General may lodge an appeal with any court of a Resident Magistrate.

   (2) An appeal under this section shall be lodged by the aggrieved person within thirty days after being notified of the decision of the Commissioner General.

   (3) No appeal lodged with the court shall be heard unless all returns due under this Act have been submitted to the Commissioner General and all Value Added Tax assessed or due has been paid:

   Provided that the court may, for good cause, waive the requirement to pay all or part of the Value Added Tax due before hearing the appeal.

   (4) Where, after hearing the appeal the appellant is found to be entitled to any refund of Value Added Tax, interest shall be paid on the refund at the prevailing bank rate from the date of the judgment.

PART XII
OFFENCES AND PENALTIES

45.   Failure to register

   (1) A person who fails—

   (a)   to apply for registration as required under section 11; or

   (b)   to notify the Commissioner General of a change in his business as required under section 13; or

   (c)   to apply for cancellation of registration as required under section 14, commits an offence.

   (2) Where the failure under subsection (1)—

   (a)   is deliberate or reckless, the person shall be liable to a penalty of K100,000; and

   (b)   for any other reason, the person shall be liable to a penalty of K20,000.

45A.   Unlawful use of Value Added Tax computerized system

   (1) A person who—

   (a)   knowingly or recklessly and without lawful authority, gains access to or attempts to gain access to any Value Added Tax computerized system; or

   (b)   having lawful access to any Value Added Tax computerized system, knowingly uses or discloses information obtained from such system for a purpose that is not authorized; or

   (c)   knowing that he is not authorized to do so, receives information obtained from any Value Added tax computerized system, and uses, discloses, publishes, or otherwise disseminates such information,

commits an offence and shall be liable on conviction to—

      (i)   in the case of a natural person, a fine of K500,000 and imprisonment for two years; and

      (ii)   in the case of a body corporate, a fine of K1,000,000 and imprisonment for two years on the part of directors of such a body corporate.

45B.   Falsification damage or impairment or record or information

   Any person who-

   (a)   falsifies any record or information stored in any Value Added Tax computerized system;

   (b)   damages or impairs any Value Added Tax computerized system; or

   (c)   damages or impairs any duplicate tape, disc or other medium on which information obtained from a Value Added Tax computerized system is held or stored, otherwise than with the permission of the Commissioner General,

commits an offence and shall be liable on conviction to imprisonment for ten years.

46.   Failure to issue tax invoice

   A person who fails to issue a tax invoice as required under section 25 for goods supplied or services rendered commits an offence, and shall—

   (a)   be liable to a penalty imposed by the Commissioner General of ten times the value of the Value Added Tax invoiced in the transaction or K500,000, whichever is greater; or

   (b)   upon conviction, be liable to a fine of twenty times the value of the Value Added Tax invoiced in the transaction or K1,000,000, whichever is the greater, and to imprisonment for two years.

46A.   Failure to use electronic fiscal device

   A user of an electronic fiscal device or any person who is required to use an electronic fiscal device, who fails to do so without approval, commits an offence, and shall—

   (a)   be liable to a penalty imposed by the Commissioner General of K500,000; or

   (b)   upon conviction, be liable to a fine of K1,000,000 and to imprisonment for two years.

46B.   Fraudulent use of electronic fiscal device

   A person who, with intent to defraud, takes steps to use electronic fiscal device in a manner that is aimed at misleading, deceiving, or manipulating information sent to a system or the Commissioner General, commits an offence and shall, in addition to payment of tax which is payable—

   (a)   be liable to a penalty imposed by the Commissioner General of twenty times the value of Value Added Tax or K5,000,000, whichever is greater; or

   (b)   upon conviction, be liable to a fine of K10,000,000 and to imprisonment for five years.

46C.   Tampering with electronic fiscal devic and software

   A person who tampers with or causes electronic fiscal device to perform improperly, commits an offence and shall—

   (a)   be liable to a penalty imposed by the Commissioner General of twenty times the Value of Value Added Tax or K5,000,000 whichever is greater; or

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