…as Schlettwein cracks the whip
Government has warned that it will not be afraid to implement strict measures – such as asset seizures – to ensure that all taxpayers honour their tax obligations – a measure aimed at boosting state revenue.
Finance minister, Calle Schlettwein, pulled no punches when he urged defaulting taxpayers to honour their national obligation while addressing officials within his ministry this week and called on defaulters to make use of the tax incentive programme. “For all those who remain in arrears after July 31, the receiver will enforce tax laws and collect taxes that could include asset seizures, appoint agents and even go as far as freezing assets to collect outstanding taxes. But we do not want to put this threat upfront because we are optimistic that the incentive package will be addressed in full,” warned Schlettwein.
The Tax Incentive Program for Arrears Recovery started this week to boost tax revenues. He said the current tax base is skewed, hence there is need to balance it.
The tax incentive programme would require taxpayers to pay off the outstanding tax amounts, and only 20 percent of the interest accrued on the principal tax debt. The Treasury would write off all penalties and 80 percent of the interest accrued, provided that a payment for the full tax amount and 20 percent of interest is made. The programme took effect on February 1 and ends on July 31, 2017. Payment for the full tax amount and 20 percent interest must be made not later than July 31, 2017, for one to benefit from the incentive programme. Government recently admitted that the tax collection system is too lenient when it announced that it will write off close to N$15 billion owed by taxpayers. This comes at a time when the money is needed desperately to save the country from an economic meltdown. Statistics provided by the finance ministry recently indicate that there are currently 665 458 taxpayers in the country, but it seems not everyone that ought to contribute to the country’s tax kitty is honouring their obligations.
Ethics, integrity, PPPs
At the same occasion, the finance minister also spoke tough on officials who defy, defraud and flout ministerial procedures while at the same time urging officials to do more than what is expected from them to improve service delivery. Officials in the Ministry of Finance, who are not up to scratch from a performance and ethical view, came under fire at the ministry’s annual staff meeting held this week. This came amid the ministry’s attempts to fathom why so many fraudulent activities and limited service delivery still persists.
“From now on we must focus on spending funds on things we need, not the ‘wants’,” he said.
“We must not be robots by only doing what our job requires us to do, if we can do more let us do so and share ideas to improve the system. We must be open to make suggestions. If the public finance system falters it creates a pain to the nation, hence we must do more to exceed our targets,” said the minister. Often soft-spoken and diplomatic, Schlettwein was not shy this time around to speak his mind. “There are some rotten apples in the system who are dishonest, corrupt and flout the rules and it is so disappointing to see such practices happening. There will be no tolerance for fraud because I fear the situation will get worse if not tracked,” he said.
He warned dubious officials that defrauding the ministry deprives everyone in the country from a “good life”. “The money being stolen is needed to develop the country, and by allowing it to happen you [officials] shoot yourself in the foot because you are weakening your chances of living a good life,” he warned. Schlettwein singled out the Inland Revenue office as the main culprit when it comes to the lack of integrity. “The revenue offices are doing okay, but it deteriorates when it comes to integrity. People who lack integrity must be reported and prosecuted. If they are allowed to remain in the system we will lose the trust of our clients and thus make life difficult when it comes to implementing our programmes. Please help the country by remaining honest,” he said.
The minister also lashed out at government agencies that overcommit by approving expenditures that have not been budgeted for. He also underscored the need for public private partnerships to ease the burden from government. “Our development agenda is too large to depend on public finances. The public finances has the ability to leverage some of its capital and chip into our development agenda,” he said. But for public private partnerships (PPPs) to work, Schlettwein highlighted the importance of transparency and mutually beneficial agreements between the parties involved. “Public private partnerships are key to development. Yes there are risks, but as long as the risks are shared and the benefits are equal I believe this model can work.”