By: Nghiinomenwa Erastus
Late payment of tax payable will result in a 20% penalty of the outstanding amount, while late submission of returns will be penalised N$100 every day they are late.
A taxpayer will be penalised for underestimating their tax debt, penalties equal to the underpaid amount.
Moreover, interest will be charged at 20% per year, calculated daily and compounded monthly.
This is according to the Namibia Revenue Agency manager for stakeholder engagement Tonateni Shidhudhu.
The Villager engaged the agency after it has revealed that 117,600 taxpayers have been penalised and owe the revenue N$36 billion in penalties by 30 September 2021.
According to Shidhudhu, there are different types of penalties depending on the violation.
A late payment penalty is charged on payments that are not paid on time, set at 20% of the outstanding amount.
The penalties charged on late payment are capped to the outstanding capital amount, and they will not go beyond the exceptional capital (payable) amount.
“This applies to capital amounts outstanding as of the 2009 tax year,” he said.
Then there are late submission penalties which are imposed on returns that are submitted after their due date.
This charge is set at N$100 per day, not capped.
There is also underestimation penalties charged on an annual return, based on the interim payments made concerning the annual tax debt.
Provisional payments estimate what one final tax will be based on their historical and current transactions.
Shidhudhu explained that this penalty is equal to the underpaid amount.
This highlights that taxpayers have to adjust their interim payments based on their annual profit estimate for the tax year to the actual figures at the end of the year.
To pay the difference, especially if they ended up making more; if not, the difference is what becomes an underestimation penalty.
So apart from the outstanding tax, the taxpayer will be charged underestimation penalties also.
Taxpayers will also be charged penalties by auditors depending on the violation that an auditor picked up.
These are called audit penalties- one can be charged with penalties on False Declaration and misrepresentation.
According to Shidhudhu, the discretion lies with the auditors.
The agency has also announced that the state is owed N$8 billion on interest by 137 000 taxpayers.
Shidhudhu explained that interest is charged on the outstanding capital (tax payable) amount at a rate of 20% per year, calculated daily and compounded monthly.
The interests charged are capped to the outstanding capital amount- they will not go beyond the exceptional capital amount.
This applies to amounts outstanding as of the 2009 tax year.
After NamRa announced what taxpayers owe the state, some responded that the ministry is to be blamed for late payment and submission due to their E-Filing system migration.
Shidhudhu said the system does not contribute to the penalties.
He also added that the agency would attend to queries on penalties and interest as soon as possible.
The agency Tax Relieve Programme is currently running to give taxpayers relief regarding their penalties and interests after meeting the qualifying criteria.