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Government to charge tax defaulters

Mon, 29 August 2016 16:46
by Rodney Pienaar

The Ministry of Finance will soon be pursuing the legal route to pressure both local and international companies that are operating in the country without remitting the taxmen’s dues.
This was revealed by the Minister of Finance Calle Schlettwein in an interview with The Villager last week.
Schlettwein revealed that there are a number of mechanisms put in place for tax defaulters and the ministry will soon look into the matter since there are no clear indications as to which category of companies can be implicated as tax defaulters.   
“There is a number of tax defaulters ranging from small companies to cooperate multibillion dollar companies and one cannot make out and point at category of companies as part of the tax defaulter companies.  There are mechanisms in place to deal with these companies as most companies are known as not paying tax. This is a very complicated matter, we have a number of mechanism in place,” Schlettwein said.
He added that “ At first a notification is given to companies and if they don’t comply we seize their banking accounts in case the accounts are not able to cover the debt than we involve the court of law. In most cases the court is likely to order that a company’s assets be auctioned to cover the debt.”
However Schlettwein could not say how much the companies owe the government regarding tax defaults but urged business community to pay tax to avoid tax defaults.
Last week the Inland Revenue Office (IRO) announced that all companies are now required to submit good standing certificates in order to be paid for completing government tenders.
This come after the state’s decision to track down companies that do not comply with tax laws in order to take further steps The Villager learnt.
Schlettwein also added that, “We will be sending out teams to visits companies on a regular basis to ensure that they are registered and pay tax in order to improve compliance with tax laws.”
The Tax Act states that if a person or a company fails to pay all taxes due by the due date, there is provision for the imposition of a 10% fixed penalty, and simple interest at 20% per annum.
If a person or company neglects to submit an income tax return on or before the due date, he or she shall be liable on conviction to a fine not exceeding N$300, or to imprisonment not exceeding three months or both.
Section 68 (1) of the Income Tax Act empowers the MoF, to estimate the taxable income of any person who failed to submit a return with the relevant office. Taxpayers should thus not wait for demands or summons to be instituted against them before they furnish returns of income.
The Villager learnt that fact that private businesses and entrepreneurs have to determine their own tax liabilities or are expected to withhold taxes and pay such taxes voluntarily poses the risk of under- declaration and non-disclosure of all their taxable income, which can be regarded as tax evasion.
The Villager understands that forms of tax evasion included value-added tax (VAT), evasion of customs duties through smuggling and mispricing, and corporate tax evasion such as misuse of special zero-percent VAT rate. Gambling industry and nonprofit organisations are also part of tax defaulting companies.