European Union ambassador to Namibia Jana Hybaskova has vehemently denied claims made by western media that Namibia had been blacklisted as a tax haven.
News of Namibia having been put in the list of rogue states identified as hotspots for illegal financial flows have been received with outrage with the Finance Ministry brushing it off as an unfair and exploitative action taken by giant economies over the weak.
However, in a frantic attempt to calm down flaring tempers, Hybaskova, in an urgent press conference held at the EU offices in the capital, explained that the decision to place Namibia in the list of non-compliant jurisdictions should not be read as labelling Namibia as a tax haven.
“The Council decision of the EU 28 member states categorised Namibia as a country with a non-cooperative tax jurisdiction. The list is temporary, and is based on the fact that Namibia did not respond to the questions posted,” she explained.
Namibia is allegedly found offside by the EU member states for not joining both the Global Forum on Transparency and Exchange of Information for Tax purposes as well as to sign, ratify and participate in the OECD Multilateral Convention on Mutual Administrative Assistance on tax matters.
Namibia is said to have not responded to requests sent to it to clarify, amend or abolish harmful preferential tax regimes in named Export Processing Zones and Exporters regimes.
Namibia also is said to have ignored providing its response on requests for it to join the Inclusive Framework on Base Erosion and Profit Shifting (BEPS) or to implement OECD BEPS minimum standards.
As such, Namibia was given until 17 November 2017 to respond failure of which prompted the EU to list the country in the contagious league of non-compliant countries.
Yet Schlettwein said deadline dates given to them were confusing since they were two, which saw his office not meeting it.
Hybaskova has denied the minister’s allegation of two deadline dates saying that letters seeking Namibia’s commitment to recommendations were sent on the 12th of June and 23rd of October.
Fears of losing EU funding rose this week in connection with the EU decision but Hybaskova said at the moment, an assistant fund worth 70 million euros to Namibia will not be affected.
She however made it clear that if Namibia does not comply with EU recommendations and start engagements to clean itself from this mess within 18 months, the possibility of sanctions was high.
“No direct sanctions apply to Namibia but if Namibia does not comply by 2019, sanctions will come, you have 18 months now,” she said.
She said in order to come out clean, Namibia has to receive the status of “largely compliant jurisdiction” while engagements with EU to iron out issues must be done at list once a year
She has also busted the myth that these were EU measures, rather, she said these are OECD recommendations which were agreed to by not only European member states but others like the US and Asian countries as well.
She said at the present moment, there is no negative impact on Namibia, but Schlettwein has already said Namibia’s reputation has been dirtied and has made the situation the harder for an economy that is trying to pick itself up through private investments.