Namibia urged to tighten financial laws
Avoid harming country's reputation
Popular Democratic Movement leader McHenry Venaani has called on Namibia to consider leveraging modern technologies for greater tax transparency and the detection of financial anomalies.
Popular Democratic Movement leader McHenry Venaani has called on Namibia to strengthen its financial laws and bring them up to international best standards to avoid a possible blacklisting by the Financial Action Task Force (FATF).
Venaani made the comments in the face of increased tax evasion and avoidance practices that are gaining ground.
"I urge for stricter compliance and regulation mechanisms. There needs to be tighter control over cross-border transactions; we must not allow profits to be shifted to low-tax jurisdictions. We must advocate for transparency in international tax cooperation and necessitate multinational corporations to publicly report their earnings, as echoed by the Organisation for Economic Co-operation and Development (OECD) in their Base Erosion and Profit Shifting initiative," he said.
Promote transparency
Venaani said there was a need to strengthen tax legislation to encourage tax transparency.
"Namibia should consider leveraging modern technologies for greater tax transparency and detection of financial anomalies. Further, we need to create an environment that discourages such conduct through stricter legislation and heavier penalties. I believe in the power of deterrents and insist that the punishment should mirror the severity of the offence," Venaani said.
He cautioned that a greylisting of Namibia by the Eastern and Southern Africa Anti-Money Laundering Group could have adverse effects on the economy, a situation he said should be avoided.
"A report from the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG) found that Namibia was not in line with some global best practices when it comes to AML and CFT regulations related to the legal framework and the successful prosecution of financial crimes. Non-compliance could result in Namibia being greylisted by the Financial Action Task Force (FATF), which could have significant consequences for the country's financial system," Venaani said.
Harmful consequences
The consequences of this listing would mean Namibia would not be able to attract foreign direct investment, he said.
"Reputational harm could reduce foreign direct investment, impact capital flows and increase due diligence costs. In the globalised world, Namibia cannot afford to be silent or ineffective in addressing illicit financial flows and transfer pricing. Let's remind ourselves that whether a storm breaks or builds us depends on how we choose to confront it," Venaani said.
Venaani made the comments in the face of increased tax evasion and avoidance practices that are gaining ground.
"I urge for stricter compliance and regulation mechanisms. There needs to be tighter control over cross-border transactions; we must not allow profits to be shifted to low-tax jurisdictions. We must advocate for transparency in international tax cooperation and necessitate multinational corporations to publicly report their earnings, as echoed by the Organisation for Economic Co-operation and Development (OECD) in their Base Erosion and Profit Shifting initiative," he said.
Promote transparency
Venaani said there was a need to strengthen tax legislation to encourage tax transparency.
"Namibia should consider leveraging modern technologies for greater tax transparency and detection of financial anomalies. Further, we need to create an environment that discourages such conduct through stricter legislation and heavier penalties. I believe in the power of deterrents and insist that the punishment should mirror the severity of the offence," Venaani said.
He cautioned that a greylisting of Namibia by the Eastern and Southern Africa Anti-Money Laundering Group could have adverse effects on the economy, a situation he said should be avoided.
"A report from the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG) found that Namibia was not in line with some global best practices when it comes to AML and CFT regulations related to the legal framework and the successful prosecution of financial crimes. Non-compliance could result in Namibia being greylisted by the Financial Action Task Force (FATF), which could have significant consequences for the country's financial system," Venaani said.
Harmful consequences
The consequences of this listing would mean Namibia would not be able to attract foreign direct investment, he said.
"Reputational harm could reduce foreign direct investment, impact capital flows and increase due diligence costs. In the globalised world, Namibia cannot afford to be silent or ineffective in addressing illicit financial flows and transfer pricing. Let's remind ourselves that whether a storm breaks or builds us depends on how we choose to confront it," Venaani said.
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