The Namibia Chamber of Commerce and Industry (NCCI) has called on the state to widen the tax base to include those businesses that are evading taxes by hiding their true income.
NCCI has observed that most foreign-owned companies do not provide tax receipts and some even refuse electronic bank transfer which creates suspicions that such businesses may be trying to avoid declaring their real income to avoid paying taxes to the state the Chief Executive Officer of NCCI Tarah Shaanika has said.
“We have also noted that there are some foreign-owned businesses which still do not bank their income in local banks and appear to prefer keeping the cash. We suspect that such companies behave in that manner because they have something to hide to the Namibian government and we are concern that the government is struggling to increase tax revenue because the tax base is not broad enough,” Shaanika said.
He added that these suspicions had been reported to the state on numerous occasions, but it is not acted upon or investigated.
Shaanika explained that many businesses face bankruptcy due to prolonged delay in payment for services delivered to the state as well as tax arrears which if demanded to be paid in full will threaten their continued existence.
“Yet, we have foreign businesses getting away with non-compliance to tax. We have serious doubts about the effectiveness of the tax amnesty announced by the Ministry of Finance as an appropriate tool to increase tax collections. This amnesty as introduced at a wrong time when most businesses are struggling and their capacity to pay tax arrears has weakened signally, and we doubt that the second amnesty will do the trick in collecting more revenue considering the economic hardships which define the business environment in Namibia at the moment,” he said.
He further added that the state must rather consider widening the tax base hunt down those companies which hide to avoid income to tax and give adequate support to local businesses to grow.
Furthermore, The Villager reported that the Finance Minister Calle Schlettwein has adamantly stressed that he will not lift the tax amnesty deadline despite frantic efforts by the NCCI to negotiate the private sector out of possible legal consequence due to tax defaults.
Schlettwein is in overdrive to recover N$4 billion worth of tax revenue from companies the majority of which will be caught up on the wrong side of the law as the deadline comes. The NCCI recently held a meeting with the line ministry in a bid to strike a deal and find ways to which the cash-strapped companies can pay what they owe the tax man.