Tax Administration Act, 2021

This section says the Act is called the Tax Administration Act, 2021, and it starts on a date the Minister appoints by notice in the Gazette.

This section defines many terms used in the Act, such as tax, taxpayer, Authority, Commissioner General, assessment, filing, and withholding agent.

This section says the Act must be read together with the other tax laws, and undefined terms take meanings consistent with those laws when needed to carry out the Act’s purposes.

International tax agreements can override inconsistent tax laws once brought into force by ministerial order and published in the Gazette.

When interpreting a tax law, the interpreter must consider the context and wider purpose of the law.

The Commissioner General may issue public rulings on tax law interpretation, and a public ruling must be published in the Gazette and takes effect as specified or on publication if no date is given.

The Commissioner General may revoke a public ruling, in whole or in part, by publishing notice in the Gazette.

The Commissioner General may issue private or class tax rulings on written application, and must serve them in writing; class rulings must also be made publicly available.

The Commissioner General may base a private or class ruling on assumptions, and the ruling must state the matter ruled on and related tax details.

The Commissioner General may reject an application for a private or class ruling in listed circumstances, and must give the applicant written reasons if the application is rejected.

The Commissioner General may revoke a private or class ruling by written notice if there is reasonable cause.

The Commissioner General may charge a fee for a private or class ruling, and the Minister may set those fees by Gazette regulations based on cost recovery.

The Authority must administer and give effect to tax laws in line with the Malawi Revenue Authority Act.

This section lets tax officers exercise certain powers across tax laws and protects them from liability for good-faith acts done in performing their duties.

The Commissioner General may delegate tax-law powers and functions to a tax officer, but not to anyone else, and cannot delegate certain listed powers.

The Authority must issue identity cards to every tax officer, and each card must show the Authority’s logo and a picture of the officer.

The Commissioner General may engage experts. Engaged experts must work under a designated tax officer, no one may obstruct them, and complaints about conflicts of interest may be lodged with the Commissioner General.

The Commissioner General may use officers from public institutions, including police, to help protect the Authority and tax officers; requested institutions must provide assistance within their authority and resources, and engaged officers work under a designated tax officer.

People covered by this section must take a secrecy oath, keep covered information confidential, and only disclose it in the limited cases allowed here.

A person generally cannot claim remuneration or expense reimbursement for complying with tax law, unless a tax law expressly allows it. The Commissioner General may also reward people for information or services that help detect tax-law offences and may issue guidelines for that reward system.

Certain people must register as taxpayers, and some must update the Commissioner General if their details change before a TIN is issued.

The Commissioner General must issue a TIN after a successful application, and TIN holders must keep it personal, use only one at a time, and report certificate detail changes within 21 days.

If you have been issued a TIN, you must include it on documents submitted to the Authority or used for tax-law purposes. You must not falsely say you have a particular TIN. Doing so is an offence.

The Commissioner General may deregister a taxpayer and cancel, amend, or replace a TIN, and must cancel a TIN in specified cases.

A person must not carry out a prescribed arrangement without a tax clearance certificate. The Minister may prescribe which arrangements need one, and the Commissioner General may issue one if the applicant meets the stated conditions.

A taxpayer may request information from the Authority about the taxpayer’s tax affairs.

A taxpayer may be represented before the Authority, and the Commissioner General may prescribe and approve the appointment process.

Some non-resident taxpayers in Malawi must appoint a representative taxpayer, and the Commissioner General may appoint one if they do not.

A representative taxpayer must carry out a taxpayer’s tax duties, comply with tax-law requirements, and may be personally liable in some cases.

If a principal or master of an aircraft or vessel appoints a representative taxpayer, they are liable for that representative taxpayer’s acts and statements for that appointment.

A person may not practise as a tax practitioner unless licensed, and someone who wants to practise must apply to the Commissioner General for registration.

Most people who are not licensed tax practitioners must not represent taxpayers, give tax-law advice, or prepare tax documents for taxpayers; pretending to be a tax practitioner is also prohibited.

English is the official language for tax laws, and tax authorities can require translations of non-English communications or documents.

The Commissioner General may prescribe required forms, and people must use the prescribed form when filing documents or when tax law requires it.

Some tax-law documents are treated as valid if properly authenticated, and the Commissioner General may correct defects except in certain disputed cases.

This section sets how tax-law declarations and paper documents may be made or filed, including oral declarations before an authorized tax officer and filing paper documents with the Commissioner General by hand or post.

This section says when a paper document is treated as served under a tax law.

The Commissioner General may set up and run an electronic document system and make rules for how it works.

A person must keep proper records in the country and retain them for at least six years, with longer retention in some disputes, applications, refunds, or investigations.

People who must file a tax return must submit it in the prescribed form and as directed by the Commissioner General. Individuals and entities must also sign the return and include a declaration that it is complete and accurate.

A person who prepares or helps prepare another person’s tax return must certify it, and if they refuse to certify, they must give the other person a signed written statement explaining why.

People who must file tax returns may ask the Commissioner General for more time, but the request must be written, state reasons, and be filed before the due date.

If a tax return is filed late, the Commissioner General can appoint someone else to prepare and file required information, and must assess the person’s tax liability.

The Commissioner General can request more tax information, and a person generally cannot amend a filed tax return without the Commissioner General’s permission.

Tax officers may enter certain premises, inspect and copy records, and seize evidence under this section, but written authorization from the Commissioner General is required for that power.

Tax laws on access to information apply even if another law says the document is confidential, privileged, or protected by public interest.

A possessor can ask a tax officer to show authorization, and if the officer does not comply the possessor may deny access. The possessor must also give reasonable facilities and assistance for powers exercised under section 45.

The Commissioner General may require a person, by written notice, to produce information or documents or attend an examination on oath. The person being examined is entitled to legal or other representation.

The Commissioner General may audit a person’s tax affairs and choose audit targets using listed compliance and tax-related factors, and must give at least 21 days’ advance written notice to the person being audited.

This section says tax may be assessed by self-assessment or by the Commissioner General, and allows later adjustments and time limits for certain assessments.

The Commissioner General may make a pre-emptive tax assessment or accept security for tax liabilities, and must use the best available judgment and information when doing so.

The Commissioner General may adjust an assessment to make sure the taxpayer pays the correct amount of tax.

When the Commissioner General makes a tax assessment, they must serve a written notice on the taxpayer.

The Commissioner General must file complete copies of notices of assessment as the register of assessments; the register is not open to public inspection; taxpayers are entitled to a certified copy of their own notice of assessment.

This section says when a tax decision is treated as made, and lets a person elect to treat the Commissioner General as having made the decision in their favour if notice is not served.

A dissatisfied person may object to a tax decision with the Commissioner General within 30 days, and may ask in writing for more time before that period ends.

The Commissioner General may vary or disallow an objection, must decide and notify the objector within 60 days, and the objector may treat silence as a deemed allowance in some cases.

The Commissioner General may issue guidelines for this Division.

A dissatisfied person may appeal to the Tribunal within 30 days, but the appeal will not be heard unless the required tax amounts are paid first.

Tax is payable at the time set by the tax law, with specific deadlines for assessments, notices, and related amounts.

A taxpayer may ask the Commissioner General in writing for more time to pay tax. The Commissioner General may reject the request, extend the payment date on conditions, or allow instalments.

Taxpayers must pay tax at an approved bank, at a tax office, or in another manner prescribed by the Commissioner General.

If a taxpayer’s payment is not enough to cover all tax due, the Commissioner General must allocate it in a set order.

The Commissioner General must establish and operate an electronic system of taxpayer tax accounts.

A taxpayer may ask the Commissioner General to let an asset interest secure a tax payment, and the Commissioner General may accept, enforce, or discharge that security under the section’s conditions.

Tax becomes a debt owed to the Government when it becomes payable, and the Commissioner General may take court action to recover unpaid tax.

If tax is not paid on time, the Commissioner General may place a charge on the taxpayer’s asset and must notify the taxpayer in writing; land or building charges must also be registered.

If the Commissioner General decides to take possession of a charged asset, the taxpayer must be given written notice, and the taxpayer may not deal with the asset once possession is taken.

A charge is discharged when the taxpayer pays the full amount or when the Commissioner General sells the asset under section 70.

The Commissioner General may sell a charged asset, but must give public notice, use public auction, and follow set timing and distribution rules.

The Commissioner General may order immigration officials to stop a person from leaving Malawi if the person has not paid tax on time and may leave the country.

The Commissioner General may distrain goods if tax on their supply or import appears unpaid or likely unpaid, and may search with a court warrant.

Managers can be jointly liable for unpaid tax, and certain persons who fail to withhold or deduct tax must pay it themselves.

A receiver of an asset in Malawi must notify the Commissioner General in writing within 14 days, must not dispose of the asset until accounting for it, and must follow the Commissioner General’s notice about amounts to be paid from the asset.

If a taxpayer does not pay tax on time, the Commissioner General may issue a written notice to a third party debtor or guarantor, and the recipient must pay the stated amount by the notice date.

A third party who cannot comply with a notice under sections 74 or 75 because no money is owed or held for the taxpayer must notify the Commissioner General by a written third party notice.

The Commissioner General may require an agent, or a resident partnership/resident partner, to pay a non-resident taxpayer’s tax by written notice, subject to stated limits.

The Commissioner General must ignore tax reductions when assessing, collecting, and recovering tax unless the reduction is sanctioned by law. Government ministries, departments, and agencies must not negotiate or enter into tax waiver or variation agreements unless they have the Minister’s written approval.

The Commissioner General may refer certain hard-to-recover tax cases to the Minister, who must consider remission, and may also remit or waive penalties or interest if good cause is shown.

The Commissioner General must submit quarterly reports to the Minister on penalties and interest remitted, waived, or claimed by taxpayers, and the Minister must report annually to the National Assembly on permissions granted.

A person may apply to the Commissioner General for a tax refund within three years of the relevant date, but VAT excess input tax must be claimed within twelve months.

The Commissioner General must decide tax refund applications within 60 days, may reject or grant refunds depending on the excess-tax finding, may ask for more information, and must issue written decisions served on the applicant.

The Commissioner General must apply excess tax against any outstanding tax liability and refund the balance within 90 days of the decision.

This section lets tax law amounts be expressed in currency points, applies the currency point system to penalties and fines, and lets the Minister adjust the currency point value by Gazette order.

If tax payment is extended or paid by instalments, interest must be paid on the unpaid amount.

If a taxpayer underestimates income tax by enough to fall below 90% of the actual amount, penalty and interest apply.

If tax is not paid when due, the taxpayer owes a penalty and interest.

If a person fails to register for tax, or fails to deregister, cancel registration, or notify the Commissioner General of a business change as required by tax law, penalties apply.

A person who does not get the required tax-law licence is liable to penalties, with different amounts for entities and individuals and additional monthly penalties while the failure continues.

A person who fails to keep proper documents as required by a tax law is liable to penalties.

A person who does not comply with a Commissioner General notice for information under the Transfer Pricing Regulations is liable to a monthly penalty.

A person who fails to file a required tax return or required document must pay penalties, including monthly continuing penalties. A provisional tax return penalty is payable at the end of the financial year in which the failure occurred.

A person can be penalized for making a false or misleading statement, or omitting material information, in a statement to a tax officer.

If the Commissioner General applies a tax avoidance provision when assessing a taxpayer, the taxpayer must pay a tax avoidance penalty equal to double the tax avoided.

A person who does not comply with electronic tax system requirements under a tax law is liable to penalties.

A person who knowingly or recklessly helps another person commit an offence under this Division is liable to a penalty equal to 100% of the tax shortfall.

The Commissioner General must assess interest or penalties, calculate them separately for each section, and give the person a written notice with key details.

Interest or a penalty under this Part is added to any tax due and does not stop criminal proceedings against the offender.

A person who fails to comply with a provision of a tax law commits an offence and may be fined or imprisoned on conviction, unless another penalty is provided elsewhere in the Act.

A person who, without reasonable excuse, fails to apply for required registration, deregistration, or cancellation of registration under a tax law commits an offence and may be fined or imprisoned.

A person or taxpayer who fails to apply for a required tax licence, or keeps operating after a licence expires, commits an offence and can be fined or imprisoned.

A person must not use a false TIN, use someone else’s TIN, or get a TIN by fraud, misrepresentation, or deceit.

Tax practitioners must not help a taxpayer create a tax avoidance scheme or help evade tax; doing so, or contravening section 31 or 32, can lead to fines or imprisonment.

If a person does not pay tax by the due date, the person commits an offence and can be fined or imprisoned.

A person commits an offence if they make a false or misleading statement, or leave out a material matter, when dealing with a tax officer in the course of duty.

A person must maintain proper documents required by a tax law; failing to do so is an offence.

A person must not impede or try to impede the administration of a tax law; doing so is an offence and can lead to fines or imprisonment.

A person commits an offence if they handle goods in prohibited ways under the Customs and Excise Act or with false declarations, and may be fined or imprisoned if convicted.

This section makes several tax-related and customs-related acts offences and sets a penalty on conviction.

A person who fraudulently claims a tax relief or refund for a tax period commits an offence.

If an entity commits a tax offence, its manager may also be treated as having committed it; if a manager commits a tax offence while acting as manager, the entity may also be treated as having committed it.

Helping, encouraging, or inducing a tax offence is itself an offence, with penalties that vary by the type of original offence.

It is an offence to unlawfully access, use, disclose, falsify, damage, or interfere with an electronic tax system or related information.

A person previously convicted of a tax-law offence is liable to double the fine or prison term otherwise prescribed.

The Commissioner General may settle certain tax-law offences if the offender admits the offence in writing and agrees to pay specified sums, but cannot do so for section 109 offences or without DPP consent where criminal proceedings have started.

Tax-recovery proceedings are treated like a debt claim, respondents cannot dispute an assessment in such proceedings, and tax-law prosecutions or convictions can proceed in parallel unless another tax law says otherwise.

This section lets a specifically authorised tax officer ask a magistrate for an order to search, seize, question, or arrest in tax-law enforcement cases.

If a tax-law case is brought against the Authority and judgment goes against it, the claimant may recover what the Authority seized, or its value, but cannot otherwise get damages.

Tax recovery proceedings and tax-offence proceedings must be started and heard by the nearest court of competent jurisdiction, with venue linked to the person, the Commissioner General’s office, custody location, or where the offence was committed. The Commissioner General may choose between possible venues.

An officer who is authorized in writing by the Commissioner General may appear in court on the Commissioner General’s behalf.

This section says certain tax-related documents and statements are admissible in specified appeal, tax recovery, and criminal proceedings, and that their admissibility is not affected by how they were obtained or by inducements related to settlement or confession.

The taxpayer must prove compliance with the tax law in specified objections, appeals, tax recovery matters, and tax-law offences.

Witnesses for the Authority or Government, and tax or police officers testifying in the listed proceedings, are not required to reveal certain tax-related information or confidential reports/information.

A tax decision cannot be stayed or otherwise affected by tax-recovery proceedings, proceedings for a tax-law offence, or the Commissioner General compounding an offence, subject to section 56(5).

Providing security for tax compliance is not a defence in tax recovery proceedings or in proceedings for an offence under the tax law.

The Commissioner General may publish a list of certain tax offenders in the Gazette or another widely circulated newspaper.

Tax recovery proceedings and tax-law prosecutions must start within six years, and a tax officer may seize prohibited goods at any time.

The Minister may make regulations by Gazette notice to carry out this Act, including rules requiring people to provide information, special tax payment/recovery schemes, and offences and penalties for breaches.

Pre-commencement international agreements keep their effect; old tax-law forms and documents may still be used; pre-commencement tax liabilities may be recovered through fresh proceedings, subject to existing recovery action.