Trustco lives to fight another day

Judge Shafimana Ueitele, in a judgment late yesterday, ordered the Namibia Revenue Agency (NamRa) to unfreeze bank accounts of 42 Trustco Group Holdings Limited entities, pending the outcome of another court battle involving the company.This after the revenue agency froze all bank accounts linked to the group on 1 November due to more than N$200 million Trustco owes the taxman.Trustco and 42 of its entities then filed an urgent application against NamRA, and parties appeared in the Windhoek High Court yesterday.The group sought to regain access to its accounts via a temporary interdict, as well as to stop the implementation of decisions made by NamRA until its challenge of the constitutionality of certain provisions of the Income Tax Act and the Value-Added Tax (VAT) Act is concluded.The other respondents in the matter include the Attorney-General, government, the finance minister, the commissioner of Inland Revenue, the commissioner of NamRA, the chairman of the revenue agency’s board and First National Bank (FNB) Namibia.“The applicants [Trustco] are concerned about the timing of the respondents&#039; relevant decisions. They were taken at a time when Trustco and Trustco Bank Limited (TBN) are involved in a dispute with the Bank of Namibia (BoN). It concerns a BoN decision to liquidate TBN, while TBN disputes any bankruptcy.“There is a legitimate concern that the decisions in question are just a strategy to assist the BoN in the aforementioned litigation and the decisions were made with a hidden agenda," Floors Jacobus Abrahams, Trustco’s executive financial director, said in a statement.Urgent applicationThe statement Abrahams submitted to the court consists of two parts.The first was brought on an urgent basis and requested that certain steps and actions by NamRA be temporarily stopped until the review application - which constitutes the second part of the application - has been completed.Trustco also asked the court to order FNB to allow the company to use its bank accounts temporarily.The second part of the application requested the review and setting aside of decisions made by NamRA, while Trustco has also challenged the constitutionality of provisions relied upon to make these decisions.N$200m debtIn a letter NamRA sent to Trustco on 3 October, the revenue agency said the group’s companies collectively owe taxes of more than N$200 million, with almost N$104 million in interest.In the letter, NamRA further stated that the current payment agreement is not sufficient and requested that each entity enter into a separate payment agreement."The payment for the group is not being met and there is no consistency in the amounts or when the payments are made," it read.NamRA requested the group to pay 30% of the total amount due for each company within seven working days from the date of the letter. NamRA gave Trustco the opportunity to propose a payment agreement for each of the entities."If this is not complied with, it will lead to the recovery of tax by third parties in terms of Section 91 of the Income Tax Act," the agency warned.On 20 October, NamRA again issued a letter saying its 3 October request had not been complied with. According to the letter, the agency received only two payments of N$2 210 857 and N$471 817 respectively."You are hereby requested to comply with the demand in the letter dated 3 October 2022 and settle the outstanding tax balances, including penalties and interest, immediately. If you fail to do so, NamRA will have no choice but to take advantage of the provisions in the tax laws."FrozenDays later, on 1 November, NamRA requested FNB to freeze the accounts of Trustco&#039;s companies.According to Abrahams, this happened without any notice."NamRA&#039;s actions caused the majority of the Trustco Group&#039;s companies to be unable to run their day-to-day business and unable to pay their employees and creditors - resulting in immense irreparable damage," he said.According to his statement, the decisions taken by NamRA violated the group’s rights in terms of Section 18 of the constitution.Trustco further argued that Section 91 of the Income Tax Act as well as Section 36 of the VAT Act are unconstitutional and demanded that they be referred to parliament for amendment."The relevant decision-makers rely on the mechanisms for the recovery of tax under the Income Tax Act and the VAT Act and therefore rely on legislative provisions which, according to [Trustco], are unconstitutional in that they unfairly infringe on the taxpayers&#039; constitutional right to fair and fair administrative action, access to court and the right to property,” the statement read.WithdrawUeitele yesterday ordered NamRA to withdraw notices issued in terms of the Income Tax Act and the VAT Act, adding that “no new notice regarding the applicants [Trustco] may be issued pending the outcome of Part B of the application”.According to the court order, NamRA must retain the fees collected in terms of the notices and this will be offset against Trustco&#039;s tax liabilities.The case was adjourned until 15 November.– kristien@republikein.com.na

Trustco lives to fight another day

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Namibian Sun 2025-04-04

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Trustco lives to fight another day

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Namibian Sun 2025-04-04

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