By Patience Nyangove
THE Finance Ministry is set to appoint agents, who will apply to the courts to attach and auction off the assets of tax dodgers.
It will also 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.
This was confirmed by Finance Minister, Calle Schlettwein, who said that after the lapse of the 31 July deadline for people to take advantage of the current incentives to pay their outstanding taxes, his ministry would be left with no option but implement harsher measures.
This follows after Inland Revenue, which resides under the Finance Ministry, only managed to collect a paltry N$138 million of the outstanding N$4 billion principle amount owed by tax defaulters, since government starting offering incentives to individuals and businesses in February to pay.
The incentives include the State writing off N$12 billion in penalties and interest attached to the principle amount.
Tax defaulters are now only required to pay the principle amount owed and 20 percent in interest charges.
However, the lack of response from defaulters has now forced the Finance Ministry to look at implementing harsher measures, which include applying to the courts for attachment orders, before auctioning off both the movable and immovable assets of defaulters.
It will also be seeking garnishee orders against the bank accounts of individuals and businesses that have failed to pay their taxes.
It also says that any company, which owes the taxman, will now be blacklisted and barred from bidding for State tenders, until they clear their outstanding taxes.
However, the Namibia Chamber of Commerce and Industry (NCCI) has warned that such drastic actions will lead to many northern businesses retrenching all their workers, and closing shop.
Commissioner of Inland Revenue, Justus Mwafongwe, said on Tuesday that it was disappointing that people had not taken the ministry’s tax repayment incentives seriously.
“Since February, when the tax incentive campaign was launched, we have only collected N$138 million. People must be serious; they are not forthcoming, even though we have given them this incentive. They have been pleading with us that their accumulated debt in outstanding tax returns is now too much, and we came up with this incentive to assist them, but they are not taking it seriously, still,” Mwafongwe said.
“Participation has not been that good. If they miss this opportunity, then we will do everything to claim the outstanding money, including going over to taking money from their bank accounts.”
Schlettwein said that after the lapse of the July deadline, his ministry would be left with no option, but used harsher measures against anyone that owes outstanding taxes.
He added that once the tax incentive period lapses, the ministry will not extend it.
“We stand by our deadline, and once it lapses, we will be left with no option, but to enforce much harsher measures and means to get what we are owed. We will start with the appointing of agents that will use garnishee orders and the attaching of assets, both immovable and movable, which will be auctioned off.
“Those who participate in government tenders will be blacklisted and without any certificate of good standing, they will be excluded from tendering,” Schlettwein said.
However, NCCI Northern Branch Chairperson, Tomas Iindji, poured scorn on the Finance Ministry’s threats to blacklist, attach the assets and apply for garnishee orders against the accounts of business people, who owe government tax, saying such actions would lead to the collapse of many companies, and massive retrenchments.
Iindji also said that government owed a number of their members a substantial amount of money, for services rendered.
Northern business people have been reported to be among the majority of tax defaulters in the country.
Schlettwein said earlier this year that the taxpayer population for the ministry’s Oshakati Inland Revenue Regional Office contrasts vastly with the amount of tax paid by the North.
According to tax administration information, the Oshakati regional office has the second highest tax register in the country, after Windhoek, but in terms of tax collection, the northern office is said to be in fifth place out of the eight tax regions.
Schlettwein noted that during the 2015/16 financial year, only N$36.86 million was collected by the northern office, while the total taxpayer register stood at 81 114, which equated to N$450 being collected from each taxpayer.
Out of the total number of taxpayers for the whole tax region, only 22 taxpayers are huge payers.
“Government needs to come to the party. We don’t have a problem with the action they are taking, but they need to be realistic. Our members have a lot of money they are owed by government and State-owned enterprises, yet government wants to take action against us, when it owes us as well. We need to sit down and engage each other, since some of these arrears come a long way,” Iindji said.
He added that there was a need for some of their members to commit themselves to clearing their outstanding tax debts.
“We are also trying to engage with our members, to pay their outstanding tax. The problem is also that when some of our members entered into business, years ago, they had no knowledge of accounting and the keeping of financial records, so this issue of outstanding taxes is not entirely of their own making.
“So if government takes any drastic measures, this will lead to about 60 percent of businesses retrenching workers in the North, and they will retrench by 100 percent,” Iindji added.
Confidente. Lifting the Lid. Copyright © 2015