By Hilary Mare
FOLLOWING widespread complaints by the business community owing to a directive earlier issued by the Inland Revenue department stating that Government will no longer do business with non-tax compliant businesses, the Namibia Chamber of Commerce and industry (NCCI) has managed to have the finance ministry reverse the directive on condition that it would partner the ministry on a tax compliance road show.
Justus Mwafongwe, commissioner in the inland revenue department at the ministry of Finance had in his letter to Government departments last month stated that Government had resolved to only conduct business with those who are tax compliant in terms of submission of statutory tax returns and payment of taxes hence the introduction of a certificate of good standing as a pre-requisite for contracting any person to provide goods or service.
“If any contractor or service provider who does not provide a valid certificate of good standing at the time of claiming any payment for work done or service rendered such payment should not be made.
“Any contractor or service provider who fails to provide a valid certificate of good standing must be referred to the IRD in order to get a letter indicating how much tax arrears to be withheld and transferred into state account,” he extended.
In a turn of events Tarah Shaanika, Chief Executive Officer of the NCCI wrote to the members stating that the NCCI and the Ministry of Finance leadership had a productive engagement with the PS of Finance and the Commissioner of Inland Revenue on the requirements for tax good standing certificates to accompany any invoice by suppliers to the Government in efforts to resolve the issue of good standing certificates required to accompany invoices by businesses to the Government.
“This requirement has serious implications for businesses and the ease of doing business in the country. It has put a heavy burden on Namibian enterprises, most of which are small or medium sized which are now required to apply for good standing certificates in order to claim payments for goods and/ or services already supplied to the Government. This is in addition to a requirement for a good standing certificate at the time of submitting quotations prior to procurement of goods and services from them by the Government. “In principle, the Ministry has agreed to do away with that requirement and a directive to that effect should be issued next week. We were impressed by the good understanding and cooperation of the PS and her team.
We will send a letter to thank them for hearing us out. “We also agreed to partner with the Ministry to embark on Tax Compliance road show to educate our members on tax obligations and assist them through training to make accurate tax returns submissions. Branches in the respective regions will communicate dates to its members in due course,” reads the letter that has been seen by Confidente.
In support of this move, NCCI northern branch chairman Tomas Iindji said that his branch had initiated the dialogue with the Ministry of Finance and encouraged fellow members to pay tax.
“All taxpayers from individuals, SMEs and corporates should pay their taxes because if they do not this has implications owing to the fact that if taxes are not collected everyone will suffer in that Government pulls back in spending,” he added.
Confidente made an inquiry with securities company, Simonis and Storm to find out how this new move impacts the economy with Frans Uusiku one of the internal economists seconding the move and advised on a gradual approach to implementing tax regulations.
“From a State sovereignty perspective, business owners must comply with on-going Government rules and regulations, and that they should be educated on the potential consequences of noncompliance to their business. “Likewise, it is also important that the future implementation of these types of regulations should take a gradual approach to accord businesses sufficient time to adjust to new regulatory conditions.
“We welcome the cooperation reached between the NCCI and the Ministry, more so that that there is a joint commitment to embark on a road show to educate the business community on tax compliance,” he said.
Confidente. Lifting the Lid. Copyright © 2015