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| National |
| Muluzi abused duty-free privilege |
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by
Mabvuto Banda, 02 October 2004
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09:33:41
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Former President Bakili Muluzi abused the privilege accorded to a sitting head of state to import duty free items for personal use when he brought in hundreds of vehicles for the ruling United Democratic Front (UDF).
Muluzi used the privileges in the Presidents (Salaries and Benefits) Act, of 1994 to avoid paying duty amounting to millions of kwachas.
The Act, among other benefits, allows a sitting president to import “duty free items for personal use”.
When asked to comment on why Muluzi did not pay duty on the UDF cars, the Malawi Revenue Authority (MRA) on Friday last week said that under the Presidents (Salaries and Benefits) Act, the President is entitled to duty free importation of items for personal use.
“This implies that under the Act, the President was entitled to import any items for personal use,” said MRA spokesperson Kitty Chimseu.
MRA was noncommittal on how many cars Muluzi brought into the country saying: “There are no limitations on the number of items the President can import, as such we are not obliged to know the number of items the former president imported for personal use during his tenure of office.”
Head of Law Faculty at Chancellor Colllege Edge Kanyongolo said on Tuesday last week that the MRA was misinterpreting the Act by saying Muluzi could bring in any number of items using the Act, because the cars that Muluzi brought in are not for personal use.
Kanyongolo argued the vehicles are not for personal use but institutional use and “therefore this was abuse of the privilege by the president”.
“My personal view on this is that it is an unreasonable interpretation of the provisions [of the Act]. The president abused his office,” Kanyongolo said.
Malawi Law Society President Charles Mhango concurred with Kanyongolo saying that it is clear Muluzi abused office “because the cars are not for personal use, but rather are used by the UDF”.
A source at MRA's Taxation Department in Blantyre said that what Muluzi was doing was tax avoidance by abusing the privilege accorded to him in the law.
“He abused this facility and, of course, he used the Minister of Finance, Friday Jumbe, to give duty waivers because he knew that the Act was not enough to allow him to clear all the cars,” said the source.
But Jumbe said in an interview last Friday the importation of cars for the UDF was not a phenomenon.
“I did not do that, there are other people before me who did that,” said Jumbe.
Efforts to talk to his predecessor Mathews Chikaonda proved futile while Aleke Banda, who served as Minister of Finance from 1994 to 1997, said on Thursday that the only time he was involved was during elections.
“As far as I can remember I would have been involved in giving duty waivers during elections because every political party, not only UDF, is allowed to apply for duty waivers on any anything,” Banda said.
But Banda added that at other times, Muluzi might have used other channels to get the cars in.
UDF Treasurer-General Khumbo Kachali Friday admitted that Muluzi bought the vehicles and gave them as a gift to the party.
“Because the national chairman loves the party, he bought the cars and gave them to us and he still continues to finance the party,” Kachali said.
But he could not say whether the cars are registered in Muluzi's name or not.
“I don't see any problem with that. Whether they are registered in his name or the UDF does not matter as long as they are working as intended,” Kachali said. Muluzi's newly-appointed spokesman Sam Mpasu said the former president was using the law that governs political parties on importation of vehicles.
“The law stipulates that any political party, not only the UDF, imports campaign material duty free,” said Mpasu, adding that this is not limited to any particular period.
The Nation Online has also established that Muluzi and the UDF failed to finish paying for some cars bought from CFAO Malawi Limited.
CFAO is one of the companies that supplied 4 x 4 twin cab vehicles driven by UDF regional and district governors across the country. The motor dealer has since gone to court demanding a settlement of close to K4.5 million.
Court documents in our possession show that CFAO Malawi is asking the court for a settlement of K3.9 million and other claims amounting to K102,480.91 as statutory collection charges as well as K585,605.21 government surtax.
The UDF, through Muluzi, entered into a sale agreement with CFAO Malawi to supply motor vehicles together with repair services and the defendant agreed to pay their cost on receipt of invoices from the plaintiff (CFAO Malawi).
“The defendant is in breach of the agreement and honoured just part of the invoices and deliberately failed, refused and neglected to honour other invoices amounting to K3.6 million thereby making the plaintiff suffer loss,” reads the statement of claim.
Muluzi has been the main financier of the party in the last five years. Deputy Secretary-General of the party Paul Maulidi is on record as having said: “the UDF cannot survive without Muluzi”.
The former president brought in hundreds of cars prior to the May polls in party colours and distributed them all over the country.
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