Call to extend tax arrears programme
The six-month-long tax arrears programme, which sought to encourage defaulting taxpayers to settle outstanding tax arrears, ends next Monday.
The Namibia Institute of Professional Accountants (NIPA) has requested an extension on an amnesty for all taxpayers. This request comes in the wake of an announcement made by the minister of finance concerning the tax recovery programme for taxpayers' arrears which will end on 31 July.
“We believe it's very difficult for taxpayers to participate in the incentive scheme, as to qualify, the exact capital amount and payment is required by 31 July before they can apply for amnesty. Many taxpayers are unaware of the amount they owe, as they have not been assessed and assessment is a lengthy process,” said Essie Herbst, CEO of NIPA.
Demonstrating concern not only for taxpayers, but for all businesses as well, Herbst said that the smaller business market represents about 10% of Gross Domestic Product, contributing to 46% of the employment market and 21% of households in Namibia.
NIPA further stresses that the economy is severely traumatised by the recession and that its focus has been to survive the negative impact on cash flow and retain their employees. Many smaller businesses have closed since January this year and some will soon face closure.
“This will also affect many pensioners who have long since retired, and have outstanding returns and payments. Individuals that have been retrenched will also be affected,” added Herbst.
“We believe that most taxpayers want to pay, but do not have the financial means to settle full amounts immediately. All taxpayers should be granted the opportunity to register for the scheme, irrespective of whether all returns have been submitted or when the outcome of the assessment and objections are still unknown. These measures are necessary to determine the correct liability due to the Inland Revenue and are also essential for the updating of taxpayer records,” said Herbst.
Advising taxpayers, NIPA has also urged individuals and businesses to come forward, make the capital payments and apply for the incentive programme. “If they know their affairs are not in order, they should approach a professional accountant for assistance,” Herbst said.
Providing an alternative solution to addressing tax payments in Namibia, NIPA proposes that the ministry of finance broaden the taxpayer base, instead of adding more of the burden to the current taxpayer base.
“With a population of 2.4 million people as per the latest population statistics issued by the Namibian Statistics Agency, our predications are that close to 400 000 taxpayers are bearing the weight of paying tax in the country. We also estimate that there are at least 250 000 individuals that are not registered for tax, who could and should be contributing to the tax base,” said Herbst.
The tax arrears programme was introduced on 1 February 2017 by the ministry of finance. A total of N$19 billion is owed to the ministry in unpaid taxes. It includes N$4 billion in principal tax while the remainder is made up of penalties and interest.
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“We believe it's very difficult for taxpayers to participate in the incentive scheme, as to qualify, the exact capital amount and payment is required by 31 July before they can apply for amnesty. Many taxpayers are unaware of the amount they owe, as they have not been assessed and assessment is a lengthy process,” said Essie Herbst, CEO of NIPA.
Demonstrating concern not only for taxpayers, but for all businesses as well, Herbst said that the smaller business market represents about 10% of Gross Domestic Product, contributing to 46% of the employment market and 21% of households in Namibia.
NIPA further stresses that the economy is severely traumatised by the recession and that its focus has been to survive the negative impact on cash flow and retain their employees. Many smaller businesses have closed since January this year and some will soon face closure.
“This will also affect many pensioners who have long since retired, and have outstanding returns and payments. Individuals that have been retrenched will also be affected,” added Herbst.
“We believe that most taxpayers want to pay, but do not have the financial means to settle full amounts immediately. All taxpayers should be granted the opportunity to register for the scheme, irrespective of whether all returns have been submitted or when the outcome of the assessment and objections are still unknown. These measures are necessary to determine the correct liability due to the Inland Revenue and are also essential for the updating of taxpayer records,” said Herbst.
Advising taxpayers, NIPA has also urged individuals and businesses to come forward, make the capital payments and apply for the incentive programme. “If they know their affairs are not in order, they should approach a professional accountant for assistance,” Herbst said.
Providing an alternative solution to addressing tax payments in Namibia, NIPA proposes that the ministry of finance broaden the taxpayer base, instead of adding more of the burden to the current taxpayer base.
“With a population of 2.4 million people as per the latest population statistics issued by the Namibian Statistics Agency, our predications are that close to 400 000 taxpayers are bearing the weight of paying tax in the country. We also estimate that there are at least 250 000 individuals that are not registered for tax, who could and should be contributing to the tax base,” said Herbst.
The tax arrears programme was introduced on 1 February 2017 by the ministry of finance. A total of N$19 billion is owed to the ministry in unpaid taxes. It includes N$4 billion in principal tax while the remainder is made up of penalties and interest.
STAFF REPORTER
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