Windhoek High Court Judge Eileen Rakow on Friday dismissed an urgent application by Chinese-owned Zhong Mei Engineering against the Namibia Revenue Agency to return N$33 million from their bank account in lieu of outstanding taxes.
Zhong Mei approached the High Court on an urgent basis after NamRA used a section of the Tax Act to instruct Standard Bank Namibia to transfer the money to them.
It claims the Chinese-owned company, who scooped several lucrative road construction tenders valued at almost N$1 billion failed to pay taxes for several years.
In their application, Zhong Mei Engineering named NamRA as first respondent, the commissioner of the revenue agency, Sam Shivute, as second respondent, Standard Bank Namibia as third respondent, the Bank of Namibia as fourth respondent, the minister of Finance and Public Enterprises as fifth respondent, the attorney general as the sixth respondent and the Intelligence Strategic Enforcement Unit at NamRA as seventh respondent.
Judge Rakow said in her view, the “pay now argue later” concept applied by NamRA was not wrong and that the money attached must remain with NamRA until the matter is resolved as it is in the public interest. She further ordered that the parties must return to court on 5 September to determine the way forward.
According to documents filed at court, Zhong Mei registered as a taxpayer in 2013 and has since filed zero tax returns for each year despite being involved in lucrative construction tenders for the government. NamRA then did an assessment and informed Zhong Mei that it owes taxes in the amount of N$33 031 543 and proceeded to instruct its agent Standard Bank to transfer the money to its account. The Chinese then approached the High Court seeking orders to inter alia review and set aside the decision by NamRA to appoint the bank as its agent and pay over the N$33 million; declaring the notices of assessment as invalid and ultra vires; declaring the decision to appoint the bank and its instructions to transfer the money as unlawful, unfair, irrational and ultra vires certain sections of the Income Tax Act; declaring that the Intelligence Strategic Enforcement Unit of NamRA has no legal power, competence, capacity and right under law to appoint the bank as agent and instruct it to transfer money from their account, declaring that it is only NamRA, its commissioner and the minister of finance that can appoint an agent, further, they asked that section 91 of the Income Tax Act be declared unconstitutional. Also, Zhong Mei wanted the money deducted returned to them within two days of the court order. Judge Rakow struck down all these claims. In her judgment, she said the court only had to decide as to whether a case was made out for the return of the money transferred out of the applicant’s account by Standard Bank who was appointed as an agent by NamRA pending the hearing of the remainder of the application. She further said that in the circumstances she found that the pay now argue later concept that is universally accepted in such matters is relevant and as such, the monies attached should remain with NamRA pending the finalisation of the matter.
She ordered that costs will stand over for determination at the end of the hearing of the main application.
Zhong Mei was represented by Sisa Namandje and the State by Thabang Phatela. -rrouth@nepc.com.na