Namibian treasury peeved by lukewarm reception to tax amnesty

By Anastasia Paulus

WINDHOEK – The Namibian treasury has expressed concerns over slow response by the public to settle their tax debts under a six months grace period that will lapse end of this month.

Finance Minister Calle Schlettwein last week revealed that five months after his department introduced a tax incentive programme, only a tiny fraction of the R4 billion that government hoped to recover from tax defaulters have been collected.

Earlier this year, the ministry of finance through the Inland Revenue Department launched a six months grace period during which taxpayers with assessed arrears given a chance to settle their debts.

Last year, the ministry of finance revealed that it is owed R19 billion in tax debt by individuals and businesses over the past 20 years.

As a result, late last year Cabinet resolved to write off R15 billion that has been accumulated from penalties and interest charges in effort to recover R4 billion that was accumulated from principle debt.

During the tax amnesty that took effect on February 1, individuals and corporates were to apply to have penalties waived in full and 80 percent of interest waived, in case they pay and settle 20 percent of outstanding interest by 31 July.

To date, Schlettwein said only R242,78 million or 6 percent of the R4 billion was collected so far.

“This pattern is worrying; noting that tax arrears are money which is overdue to the Receiver but not paid. Ours is a rule-based country and tax rules have to be applied fairly.

“All taxpayers are expected to play by the rules and meet their tax obligations,” he told media in Windhoek last week.

“When Government owes its service providers, there is unrelenting call for Government to meet its obligations. This a fair call. And for that reason, the Government commits itself to meeting its contractual obligations irrespective of the causes. Within this month, all

budgeted outstanding obligations will be met this month and all other obligations will be met within this quarter”.

He cautioned taxpayers that the deadline for settling their outstanding arrears remains the end of July.

After a disappointing public response, the Inland Revenue has been working on harsh counter measures including raiding of bank accounts of tax dodgers and forfeitures of their assets.

“I urge all taxpayers with outstanding arrears to come forth and meet their obligations within this incentive arrangement.

“When the Incentive Programme lapses, the Receiver, for the fairness of the tax system, will have to step up actions to recover these outstanding balances,” he said.

The tax incentive programme applies to taxes administered by the Inland Revenue Department such as Income tax; VAT; PAYE, Stamp Duty; Non-Resident’s Shareholders Tax; Tax on Royalties, and others.

July 2017
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