THE unfolding impasse between the country’s tax dodgers, predominantly business owners, and Inland Revenue, presents an opportunity for sober discourse.
It can be rightfully argued that the Finance Ministry is fully justified in its resolve to take much harsher measures, after the current tax payment incentive programme lapses on 31 July.
Confidente reported last week that the ministry is planning to appoint agents, who will apply to the courts to attach and auction off the assets of tax dodgers, while also seeking to blacklist firms and obtain garnishee orders, against the bank accounts of individuals and businesses that have failed to cough up what they owe the State.
The response from the NCCI Northern Branch is telling.
They say such moves will lead to mass business closures and retrenchments in the North.
There may indeed be a valid argument around the stifling of entrepreneurship and the potential closing down of businesses.
However, it is in the national interest for everyone to pay their taxes, as this makes it possible for government to embark on a full basket of programmes that can drive the nation forward.
And indeed, the lack of action and enforcement, over the years, has opened the door to the perpetuation of tax evasion by tender moguls and entrepreneurs, who for many years have ignored the State’s clarion call to be in good standing with Inland Revenue.
Perhaps the threat that they will now be blacklisted, and therefore unable to compete for State tenders, is the tonic they have needed all these years.
Understandably, there is the issue of government owing its list of service providers, as well as the issue of financial literacy, but it can also justifiably be argued that a country facing increasing tax evasion and avoidance is likely to exhibit a low productive investment mix, which means low growth.
Empirical evidence has shown that the uncooperative and non-progressive attitudes of citizenry towards tax payments result in major financial problems for government.
Obviously, it is an agreed fact that the payment of taxes is among the basic things needed for the survival of any society, and more so in Namibia, which is in a major transitory stage, in her quest for industrialisation and the provision of services to her citizens.
With very little doubt, tax evasion is a fundamental issue in public economics. Its most obvious impact is to reduce tax collections, thereby affecting the burden the compliant face, and the public services that citizens receive.
It is important to realise that government has done its part, in offering hefty incentives to tax dodgers.
And Inland Revenue should now push for what is due to the State.
Confidente. Lifting the Lid. Copyright © 2015