• September 24th, 2018
Login / Register

Govt hopes to collect N$4 billion in outstanding taxes

Finance, Front Page News
Finance, Front Page News

Edgar Brandt Windhoek-Government has extended a reprieve to taxpayers with outstanding debt on their tax accounts in an effort to bolster the country’s fiscus. The Treasury is hoping to raise about N$4 billion and inject the much-needed cash into the economy that experienced its fair share of liquidity shortages in the last quarter of 2016. Taxpayers owe the Treasury N$4 billion in unpaid taxes, as well as about N$19 billion in accrued penalties and interest. The debts date back to since independence in 1990. However, as part of the incentive the finance ministry is only aiming at recovering the N$4 billion and 20 percent of the N$19 billion, which is about N$3.8 billion. Starting next month the Treasury would extend an olive branch to all taxpayers with unpaid taxes through the tax incentive programme announced by the finance minister last year. Yesterday the finance minister Calle Schletwein said the tax incentive programme would require taxpayers to pay off the outstanding tax amounts, and only 20 percent of the interest accrued on the principal tax debt. The Treasury would write off all penalties and 80 percent of the interest accrued, provided that a payment for the full tax amount and 20 percent of interest is made. Schlettwein says the tax incentive is being introduced because the purpose of a tax regime should never overwhelm to an extent that taxpayers are unable to pay taxes or that businesses are unable to trade. “It would be a wrong approach to not offer incentives or an olive branch to these taxpayers [with outstanding taxes],” he said. The programme takes effect from February 1 and ends on July 31, 2017. Payment for the full tax amount and 20 percent interest must be made not later than July 31, 2017 for one to benefit from the incentive programme. “Non-filed tax returns, under-reported tax liability and taxpayers who never registered for taxes/paid taxes for tax periods prior to the incentive programme period, are eligible for the incentive programme, provided the tax returns are submitted during the duration of the incentive programme and payment is made for the full outstanding tax and 20 percent of the interest. Penalties and interest paid prior to the effective date of the tax incentive programme are not refundable,” Schlettwein explained. Also, taxpayers who are currently on a deferred payment plan can still apply to participate in the tax incentive programme. Arrear tax amounts relating to pending cases of fraud, illicit tax practices and corruption are not eligible for participation in the programme. Taxpayers who fail to apply to the Ministry of Finance to have a portion of the interest written off during the period allocated will forfeit the benefits of the incentive programme when it lapses. “The Ministry of Finance will then enforce its collection mandate against taxpayers with outstanding balances on their tax accounts as if the programme was never introduced,” said Schlettwein. Eligible tax periods are those where an outstanding debt on any tax account exists up until the end of July 31, 2017. The incentive programme applies to taxes administered by Inland Revenue Department, including Income Tax, Value Added Tax (VAT), VAT Import, Employee’s Tax, Stamp Duty, Non-Resident’s Shareholders Tax (NRST) and Tax on Royalties (patents, trademarks, copyright etc.) Application forms for the incentive programme will be available at all regional revenue offices countrywide and must be duly completed and submitted to the nearest Receiver of Revenue Office. Payments may be made in instalments over a maximum period of six months, and the last instalment must be made before or on July 31, 2017. Only once the full principal tax amount and 20 percent of interest is paid will the remaining 80 percent portion of interest and all penalties be waived. The Ministry of Finance has opened a specific bank account into which payments in respect of arrear taxes by participating taxpayers must be made. Normal tax payments must be made into the usual General Revenue Account. In order to determine the correct amount of tax owed, participating taxpayers must file all outstanding tax returns with the Inland Revenue Department.
2017-01-27 10:55:37 1 years ago
Share on social media

Be the first to post a comment...