Finance minister, Calle Schlettwein, has lashed out at the blacklisting of Namibia by the European Union (EU) as a non-cooperative jurisdiction for tax purposes as outrageous.
Namibia has been labelled as a tax haven and although the minister said that EU funding is still intact, he however said this has dented the country’s reputation, making it a potential target for sanctions.
The minister said the EU’s decision is unilateral and defies the relationship it has with Namibia as equal partners while the former had not engaged the latter before taking drastic action.
“This action is harmful to us,” the minister lashed out.
Speaking with The Villager on the possible immediate impact of this blacklisting on the economy, Schlettwein said it is too early to say.
“There is a possibility of sanctions. There is reputational risk, this is unfair,” the minister tersely said.
The blacklisting comes as the worst news for an economy that is limping with a crippling recession, has suffered a Fitch downgrade and is yet to face another obvious negative rating from Moody’s.
The bleakness of the future, as the economic year winds up, is glaring and the minister could not admit that.
“It can make matters worse and the more difficult,” he said without mincing words, “We believe that we have not been treated equally and call upon the EU to correct what already has caused serious harm to Namibia’s outstanding reputation as a politically stable democracy with rule of law based institutions.”
The manner in which Namibia was given a deadline for compliance with EU recommendations has also raised some stink which has raised questions over the rushed and dramatic manner in which the local economy has been blacklisted.
The minister confirmed that EU informed Namibian authorities of the deadline to comply with all its orders only on the 17th of November.
However, a miscommunication of dates confused local authorities as two deadlines were submitted, the 5th and the 12th of December 2017.
“We thought we were within the (parameters of) the deadline but we were not,” the minister lamented, explaining that due to this they had to miss the actual deadline.
“Missing a deadline cannot mean that Namibia is a tax haven,” he burst out, and he said the EU was rather being unjust, prejudiced, partisan, discriminatory and biased.
He also said that a year ago, Oxfam released the top ten 15 tax havens list which included the British Virgin Islands, Singapore, Switzerland, Hong Kong, Luxembourg, Ireland and the Netherlands among other islands.
Incensed by the new list of tax havens into which Namibia had to be dragged, Schlettwein said, “Non of the above tax havens have been included on the EU list and therefore one can only speculate on the rationale applied in compiling the EU list of tax havens.”
However, the minister shied away from admitting that Namibia could be a target of economic hitmen.
Rather, he said, “I will not take it that far. It’s an effort to perpetuate the position of developed economies by picking on the weak to develop their economies,” he said, thus coming close to describing the characteristics of economic hitmen.
What has made the situation the more infuriating is the fact that, EU has taken such action on Namibia despite the country having long expected the EU to assist with illicit financial flows out of Namibia.
That the finance ministry even has gone the extra mile to rope in the brains of an EU representative, Bill Fraser, to assist in this regard is reflective of Namibia being a victim of tax havens rather than the opposite, the minister attested.
Pressed by the media on what his response was from this action taken by a body from which he comes, Fraser merely shook his head, “Shocked, I am shocked!”
Namibia has also become a casualty for trying to empower its own people through the manufacturing tax scheme which the EU described as rather potentially dangerous.
“They perceived the tax scheme as a harmful one and said that we should abandon our incentive scheme to support manufacturing. It is unfair that they should say that we must not incentivise our manufacturing,” said the minister.