Wednesday 14 April 2021
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ITAS exploits taxpayers

The new tax system with the Ministry of Finance which is purported to have replaced the old tax system has been described as a sham, after it was discovered that it exposed significant shortcomings regarding the compliance of the Receiver of Revenue.
The new tax system known as Integrated Tax Administration System (ITAS), which is a 24-hour tax assessment system for taxpayers to submit requests and returns online, became operational on 17 January this year replacing the old tax system where taxpayers had to submit their tax forms to the Ministry of Finance’s Inland Revenue directorate.
Sources close to the new tax system have informed this publication that the ITAS system has various challenges. Matters that had previously been attended to and submitted by taxpayers, now have to be attended to again since these matters which were already dealt with do not appear on the new system.
To justify the claims, an example was provided of good standing certificates which were issued late last year to certain taxpayers when they requested them, but this year the same taxpayers cannot get a good standing certificate since the new system shows that documents are outstanding which is inaccurate.
The source further revealed that the Ministry of Finance is violating Section 67 of the Income Tax Act by not issuing assessments timeously and taxpayers are required to find out from the Receiver of Revenue if an assessment has been processed, which is not their responsibility.
“Without getting an assessment timeously the taxpayer will not have an opportunity to object to any differences between the assessment and the returns submitted. The Income Tax Act states that you have 90 days from the date of assessment to object.
“In the absence of getting an assessment the right of taxpayers to Administrative Justice is ignored and in certain cases the Receiver of Revenue has requested taxpayers to prove that they did not receive an assessment timeously in order to get special exemption in submitting an objection late.
Administrative justice is a corner-stone of the Namibian Constitution. Article 18 of the Namibian Constitution states that: ‘administrative bodies and administrative officials shall act fairly and reasonably and comply with the requirements imposed upon such bodies and officials by common law and any relevant legislation, and persons aggrieved by the exercise of such acts and decisions shall have the right to seek redress before a competent Court or Tribunal.’
The Receiver of Revenue does not provide any proof of when assessments were issued and sent to taxpayers as required by law and again the taxpayers rights are trampled upon by now requesting them to prove something that is outside their control or responsibilities, remarks the source who spoke on condition of anonomity.”
The Patriot understands that the officials of the Receiver of Revenue are forcing people to register on the new system before they are willing to deal with matters that have been outstanding from before the existence of the new system.
“Since the start of the implementation of the new system VAT refunds have been delayed or just plainly been stopped. In the current economic environment the cash flow implications of this is serious for business owners.
When questioned Justus Mwafongwe, the Receiver of Revenue responded by saying “ Yes we are experiencing minor teasing issues such as VAT audit system etc but we are busy fixing them.
Our system is working – for example if a client comes with a specific issue, we can be able to assist. “
Correspondences were issued by the Receiver of Revenue to state that refunds that have been audited cannot be paid at the moment since the payment system of treasury and the new ITAS system does not communicate correctly. How is this fair and reasonable?” the source asked rhetorically.
A further challenge posed is that there are no benchmarks for when a VAT refund will be audited as every VAT refund is being audited even if the amounts are negligible.
Sources believe that this impacts on the cash flow of business owners in the country to the detriment of the economy.
The source added that the VAT audit process is time consuming, costs taxpayers money in paying for professional advisors to assist and results in taxpayers having to constantly follow up on how the process is going within the system of the Receiver of Revenue.
“If the Receiver of Revenue disallows certain deductions or taxes additional amounts in an assessment, no written explanations are given to taxpayers in this regard, which one would have expected in an administratively just system, and no written argument with reference to the stipulations of the Income Tax Act are given to taxpayers in order to use in lodging appropriate objections, again no administrative justice.
The Namibian Income Tax Act in Chapter 1 clearly states that the Minister of Finance and, as instructed by him, the Receiver of Revenue are responsible for carrying out the provisions of this Act.
In carrying out the provisions of this Act they must always comply with the requirements of the Constitution and in particular the provisions of Article 18.
“Documents get lost or not processed in time within the offices of the Receiver of Revenue and then taxpayers are required to submit copies and proof of submission for periods of time, which again is against the principle of Administrative Justice,” the source said.

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