Taxman conned
Income tax refund scam exposed
• N$15.2 million paid to fraudsters • NamRA staffers fingered • Tax refunds halted • 122 taxpayers being probed
NamRA is licking its wounds after a tax refund syndicate - involving its own employees - left the agency’s coffers N$15.2 million emptier.
The scam, which NamRA commissioner Sam Shivute suspects has been going on for years, was uncovered recently and involves at least 122 taxpayers.
He said the amount could be higher seeing that there are more taxpayers implicated.
This is perhaps NamRA’s biggest test since it started operations last year. Shivute cautioned that the country’s tax affairs will be effectively managed and that the agency will continue making the necessary investment to improve its capacity when it comes to closing loopholes abused by truant taxpayers.
Shivute said the processing of all tax refund claims for individual provisional taxpayers is halted with immediate effect for three months, to determine the full extent of this scam. The moratorium will be in effect until 30 June 2022, announced Shivute at a press briefing yesterday.
In 2019, that when was the scam started picking up, according to the agency’s analysis.
NamRA staff members are also under spotlight, with Shivute saying the scam could not have taken place without inside involvement and deep-rooted internal collusion.
Shivute notes that the persons who benefited from this scam involves 122 taxpayers, who are working individuals, and work for about three institutions. Even though their banking details are known, no amount has been recovered thus far.
He further indicated that the salary ranges of those involved range between N$250 000 to N$350 000 per annum.
“The observed trend is that several individual taxpayers' profiles are changed, mostly with the assistance of taxpayer representatives, to provisional taxpayers' status, which is associated with taxpayers earning income from sources additional to their employment, such as farming,” Shivute said.
Subsequently, revised returns would be submitted with inflated expenses, which then result in tax refunds becoming due to the affected taxpayer.
“The preliminary indications are that several role-players are involved and although possibly premature, we cannot rule out the active participation of our staff in this scam,” Shivute added.
No refunds
The fraud investigation has commenced and significant progress and discoveries have been made, he said.
As a mitigating measure, the processing of all tax refund claims for individual provisional taxpayers will be halted with immediate effect for three months until 30 June 2022, to determine the full extent of this scam and its real impact on the public purse.
Tax refund claims in respect of other tax types such as individual taxpayers and Value Added Tax (VAT) shall not be affected by this moratorium.
NamRA says it has already opened criminal cases against identified suspects, while the administrative violations will also be pursued in line with the applicable statutes.
“We encourage those who might have unwittingly benefited from this scam to engage our offices across the country, to aid the investigation in exposing the true masterminds of this scam”.
“There is no way out,” Shivute said, adding that the agency will continue with its zero-tolerance approach towards tax fraud.
The scam, which NamRA commissioner Sam Shivute suspects has been going on for years, was uncovered recently and involves at least 122 taxpayers.
He said the amount could be higher seeing that there are more taxpayers implicated.
This is perhaps NamRA’s biggest test since it started operations last year. Shivute cautioned that the country’s tax affairs will be effectively managed and that the agency will continue making the necessary investment to improve its capacity when it comes to closing loopholes abused by truant taxpayers.
Shivute said the processing of all tax refund claims for individual provisional taxpayers is halted with immediate effect for three months, to determine the full extent of this scam. The moratorium will be in effect until 30 June 2022, announced Shivute at a press briefing yesterday.
In 2019, that when was the scam started picking up, according to the agency’s analysis.
NamRA staff members are also under spotlight, with Shivute saying the scam could not have taken place without inside involvement and deep-rooted internal collusion.
Shivute notes that the persons who benefited from this scam involves 122 taxpayers, who are working individuals, and work for about three institutions. Even though their banking details are known, no amount has been recovered thus far.
He further indicated that the salary ranges of those involved range between N$250 000 to N$350 000 per annum.
“The observed trend is that several individual taxpayers' profiles are changed, mostly with the assistance of taxpayer representatives, to provisional taxpayers' status, which is associated with taxpayers earning income from sources additional to their employment, such as farming,” Shivute said.
Subsequently, revised returns would be submitted with inflated expenses, which then result in tax refunds becoming due to the affected taxpayer.
“The preliminary indications are that several role-players are involved and although possibly premature, we cannot rule out the active participation of our staff in this scam,” Shivute added.
No refunds
The fraud investigation has commenced and significant progress and discoveries have been made, he said.
As a mitigating measure, the processing of all tax refund claims for individual provisional taxpayers will be halted with immediate effect for three months until 30 June 2022, to determine the full extent of this scam and its real impact on the public purse.
Tax refund claims in respect of other tax types such as individual taxpayers and Value Added Tax (VAT) shall not be affected by this moratorium.
NamRA says it has already opened criminal cases against identified suspects, while the administrative violations will also be pursued in line with the applicable statutes.
“We encourage those who might have unwittingly benefited from this scam to engage our offices across the country, to aid the investigation in exposing the true masterminds of this scam”.
“There is no way out,” Shivute said, adding that the agency will continue with its zero-tolerance approach towards tax fraud.
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