The Inland Revenue department has indicated that there will be tougher regulations against people and companies that evade tax. The department indicated that due to tax campaign nobody could give the excuse that they do not know that they have to pay tax.
The Acting Commissioner of Inland Revenue at the Ministry of Finance, Justus Mwafongwe said that since the introduction of the tax campaign there has been a slight improvement in compliance. He also indicated that for the past few years they have exceeded the budget every year in terms of the amount of tax they have to collect.
The compliance also increased due to stricter measures put in place by the department. Mafongwe added that a tax intelligence and investigative unit has been set up and they have seconded two police officers who are helping to bring evaders to book.
It has emerged that some of the ministries’ staff has been suspended due to being implicated in tax irregularities. All these irregularities were uncovered by the unit that has seen a measure of success since it became operational. This unit will also be able to enact criminal cases against people who default on their tax. He also said that compliance was also higher due to the public knowing that administrative penalties could be charged.
“We can charge up 200% in Administrative penalties so if you owe N$2m in tax you will have to pay N$3m and these acts as a deterrent for people who are evading tax” Mafongwe said
The Inland Revenue department has also uncovered that many companies that tender at local authorities have been defaulting on their taxes not and as from the beginning of this month they have started investigating this to root out evaders. They have also uncovered that many of these companies belong to up and coming entrepreneurs. Companies that default on loans will not receive certificates of good standing which means they will not be able to apply in any public tender processes.
To bring evaders to book the ministry also appoints agents that approach the banks, if there is money in these accounts the money is directly deposited into the ministries account. If these accounts are empty they will also be liable to auction of the evader’s property to pay of the tax that they have defaulted on. Mafongwe also indicated that there are also plans to set up a Revenue agency that is autonomous from the government and will be responsible for the collection of tax in Namibia
To further efforts to bring evaders to book the department from will be sending officials to give out demand letters in the Omaheke Region as from the 28thof September.
The ministry of finance this year also set up the large taxpayer’s office that will manage all the tax affairs of large taxpayers. This office will also establish a specialized unit that will deal with mining taxation.