… As govt slams door on extension for those who owe N$4.8bn
By Patience Nyangove
THE Ministry of Finance has refused to extend the amnesty period that ends on 31 July, and will now move to unleash the full might of the law on businesses and individuals that owe government at least N$4.8 billion in outstanding taxes.
The rejection of an extension has led to the Namibia Chamber of Commerce and Industry (NCCI) warning of massive job losses, as companies either scale-down or close shop if government implements a range of punitive measures, which include the attachment of properties and garnishee orders against bank accounts, from 1 August.
Confidente understands that on 17 July, the Ministry of Finance had only managed to collect a measly N$270 million out of the targeted N$5.1 billion owed by tax defaulters.
In terms of companies, Confidente reported last month that over 55 200 Namibian firms owe Inland Revenue about N$3.3 billion in tax arrears, while 15 foreign companies owe N$15.7 million to the taxman.
The tax incentive or amnesty period saw the Ministry of Finance willing to write-off N$12 billion in penalties and interest, which are attached to the principle debt owed of N$4 billion.
Defaulters were still liable to pay 20 percent of the interest and penalties during the duration of the incentive programme.
Confidente has learnt that the NCCI and Finance Minister Calle Schlettwein had last Wednesday, but that pleas to the minister to extend the tax incentive programme had fallen on deaf ears.
“If we have to come up with new conditions, there is need for another Cabinet decision because if we are going to extend we need Cabinet approval. For now there is no going back. We are not threatening anyone or their businesses, and the perception being created that we want businesses to close down is not true.
“We don’t just wake up and forfeit properties or get garnishee orders against bank accounts. We follow due processes first, as prescribed by the country’s laws,” a senior official at the Ministry of Finance, who spoke on condition of anonymity, told Confidente this week.
Schlettwein’s Technical and Economic Advisor, Penda Ithindi, said the deadline will not be extended and that the minister had reiterated this.
NCCI Northern Branch Chairperson, Tomas Iindji, has accused government of trying to close down businesses, by refusing to extend the tax amnesty deadline.
He also took a swipe at government, for failing to pay businesses their outstanding monies, and yet it refuses to understand their plight.
“We still have business people and SMEs who were doing government jobs, either directly or indirectly, but they are not being paid. If government and the Ministry of Finance want to kill businesses, they must say so… businesses are crying because government could not honour its obligations on time.
“All this has been created by the different ministries. Here you want business to pay, and on other hand you do not pay them on time.
“There must be a proper modality that creates synergies among both parties. If the ministry does not want to give an extension, then the matter must be extended to Cabinet or alternatively to the Office of the President,” Iindji said.
“We cannot allow this to happen, because politicians do not want to listen to us. Businesses are the catalyst of economy, they try to eradicate poverty and create jobs for our people.”
Iindji said that what government is planning will lead to severe job losses, as business will close down.
NCCI Chief Executive Officer, Tarah Shaanika, told Confidente last week that quite a number of their members are yet to receive payment from government, since last year, and this has resulted in some of them either collapsing or struggling to remain open.
Shaanika said some of their members are owed money by government for invoices that stretch as far back as September 2016.
“We have a situation where government won’t be able to recover any money from these businesses, if it goes ahead with its threats, but if it extends the (tax amnesty) deadline this will not kill businesses that will gradually pay off their dues. The July 31 deadline is not feasible.”
Shaanika added that all businesses, across sectors in the country, are struggling currently, as the economy is mostly reliant on government.
“The private sector is so tiny and until government is able to spend again it will be struggling. There are a number of factors that have affected the economy, which include commodity prices that have gone down and the general decline of the global economy. Government doesn’t have money, because of inflated prices for work, the overcommitting on projects and the decline in SACU revenue.
“We now need to pull together, it’s not the making of government or the private sector,” Shaanika added.
Confidente. Lifting the Lid. Copyright © 2015