PUBLIC anger over Government’s spending cuts is palpable. Whilst the anti- Hage choir is keen to capitalise on it, the clearer view suggests that non-tax paying businesses and individuals have been holding Government hostage.
The engagement of two debt collecting companies to apply pressure on loan defaulters owing the Agribank well over half a billion dollars recently has carved a new dimension that Government is now more inclined to going the legal route against those owing it- and rightfully so!
The Ministry of Finance in an exclusive interview with this publication piled more weight on this notion saying that in its bid to recover N$4 billion in outstanding taxes it will not hesitate to go the way of attaching assets or enforcing garnishment orders on defaulters.
Although there is an incentive programme for outstanding tax introduced by Government earlier in the month, tax arrears still logically point to a collapse of the national Government by the widening tax gap and the butterfly effect it introduces to the whole economic terrain.
What is important to understand is that the effects of non-tax compliance are becoming more evident every year, and the amount of federal revenue lost is beginning to substantially drill holes in all of the national economic blueprints as well as Vision 2030.
At this stage it is fair to say that prosecution efforts and enforcement may be the best way to alleviate damage done by tax non-compliance as Government has literally exhausted all the negotiable avenues relating to tax collection. If the laws concerning penalties of non-compliance were stricter and more severe, individuals and companies would be less likely to evade taxes overall.
With a growing national debt, our ability as a nation to provide jobs, healthcare, international relations, and unemployment relief diminishes substantially. If the deficit continues to grow in this nature, our nation will stand to lose much more than its credit ratings.
Empirical evidence has shown that the uncooperative and unprogressive attitude of our citizenry towards tax payment results in major financial problems for Government. Obviously it is an agreed fact that payment of taxes is among the basic things needed for the survival of any society and more so for Namibia which is at a major transitory stage in her quest for industrialisation and provision of amenities for her citizens.
The more relaxed position of the Government over the years has propelled a Namibia tax system marred by tax evasion and tax avoidance and it should be noted that a country facing an increasing amount of tax evasion and tax avoidance is likely to exhibit a low productive investment mix which would mean low economic growth and the public run enterprises would be negatively affected.
Traditionally, the Ministry of Finance has focused on being reactive, waiting for taxpayers to meet their obligations before checking for errors and while this exercise is both costly and time consuming, often involving lengthy audit and appeal procedures, Government’s stance towards a reactive approach should be welcomed as it speaks volumes of Government’s intent for radical economic change.
Confidente. Lifting the Lid. Copyright © 2015