Search
Tuesday 20 August 2019
  • :
  • :

Political tax collection roadblock

screen-shot-2016-12-02-at-12-04-29-pmscreen-shot-2016-12-02-at-12-04-14-pm …As national principal tax debt hits N$4 billion
…Diamond commissioner probed
 
The process to actively collect taxes owed, which includes lifestyle audits, is in full swing but pursuing politically connected individuals has been a challenge, The Patriot has learnt.
 
The principal tax debt countrywide currently stands at N$4 billion, a situation which has prompted Finance Minister Calle Schlettwein to introduce new measures to collect the much-needed funds.
Government revenue is forecast to be in the region of N$6.2 billion for the current year.
 
The Patriot has learned that Schlettwein has sanctioned his ministry to not only investigate potential tax dodgers but also conduct lifestyle audits on people who appear to be living beyond their official means.
 
Namibia’s Diamond Commissioner and acting NAMDIA CEO, Kennedy Hamutenya, was also subjected to such an audit.
Hamutenya confirmed the audit yesterday.
 
“They [auditors] have been going through my accounts dating back from 2002 screening all the funds that came in,” he said.
Hamutenya said after the audit, he was hit with a hefty tax bill, which he disputed through his auditors.
 
“They wanted to tax me a certain amount but I disputed it because they considered things such as subsistence and travel allowances and money that I got that my brothers owed me,” he said.
 
Asked why he thinks he was a target for a lifestyle audit, Hamutenya said: “Somebody might have said something to them and they decided to probe me.”
 
Apart from Hamutenya, it is believed that a number of prominent Namibians will also be subjected to these audits.  
 
The Patriot understands that when Schlettwein exposed the fact that the Oshakati Inland Revenue office collects less tax than that of Keetmanshoop, despite Oshakati being a major economic centre, that expose was in fact an indirect announcement of the plan to launch a countrywide lifestyle probe.
 
The finance ministry is also probing people, who served on parastatal boards. The investigation is allegedly meant to look at whether those that have been serving on parastatal boards for the past 10 years have been paying taxes on such earnings.
 
Parastatals are said to have been instructed to furnish the ministry with such information. 
 
Board members earn as much as N$10 000 per board meeting, it is not known whether these funds are taxed or not.
 
The tax collection is also made worse by allegations that there are some officials in the tax offices who take bribes from businesspeople for helping them to evade paying taxes, while at the same time also helping them to fraudulently obtain tax compliance certificates of good standing. 
 
 Despite his efforts, Schlettwein finds himself in a catch-22, between his quest to collect taxes owed to government, while also having to be politically correct in his efforts not to step onto the toes of political heavyweights.
 
Ministry of Finance sources say that Schlettwein is finding it difficult to pursue politically connected individuals who owe government money. It is alleged that collections have dropped from billions in 2014, when Sam Shivute was acting Inland Revenue Commissioner, to millions in 2016. 
 
Shivute was unceremoniously removed as Inland Revenue Commissioner before his three-year contract ended.  At the time, it was reported in the media that then finance minister, Saara Kuugongelwa-Amadhila removed Shivute because he was going after politically connect business people, who failed to pay their government dues.
 
The Patriot has further learned that Shivute was primarily removed after he instructed President Hage Geingob, during his time as prime minister, to pay his outstanding tax bill. Shivute allegedly also went after Kuugongelwa-Amadhila’s husband Tobias (Tona) Amadhila.
 
 Shivute was replaced by Justus Mwafongwe, who finance officials claim is toeing the political line.
 
The Patriot is also informed that Mwafongwe at one point allegedly also reined in a junior staff member, responsible for issuing letters of demand to those who owe taxes, and cautioned them to desist from writing such letters to a prominent eye specialist doctor.
 
 With government battling to keep afloat, the selective collection of taxes is not in the country’s best interest.
 
Government has taken steps to recover millions of dollars it is owed in levies, with the Fisheries and Marine Resources Minister Bernard Esau revealing in 2013 that more than 150 fishing rights holders were in arrears with their levies to the State since 2005.
 
Last month, Schlettwein exposed the northern-based businessmen when he revealed that there is a huge under-collection of taxes among the northern business community, which has over 81 000 registered taxpayers but on average only pays N$450 per person in tax.
 
While addressing businessmen in the north, the minister said government collected only N$36 million from taxpayers registered with the Oshakati tax office during the 2015/16 financial year, this is despite the fact that the Oshakati office is the second biggest tax register after Windhoek.
 
He further revealed that Keetmashoop, which has half the population of Oshakati, pays an average of N$1 500 per taxpayer compared to the average of N$450 at Oshakati.
 
“It cannot be plausibly argued that the combined economic activities for Oshakati Region are significantly less than those of Keetmanshoop. It is an indication that there is under-collection, under-registration or avoidance or something,” said Schlettwein.



Leave a Reply

Your email address will not be published. Required fields are marked *