The Financial Intelligence Centre has had a hand in chanelling billions of dollars into State coffers over the years, as recently revenue collection in Namibia has consistently exceeded collection targets.
The Financial Intelligence Centre (FIC) is tasked to serve as a regulator and supervisor of anti-money laundering and combating the financing of terrorism and proliferation activities in the country.
During the launch of 2023/24 FIC annual report last week, the centre’s director Bryan Eiseb, said due to intelligence disclosures shared with the Namibia Revenue Agency (NamRA), the FIC managed to recover N$47.3 million for the State during 2023.
These disclosures also resulted in an additional N$39 million being raised through tax assessments.
“Wherever potential criminal activities are detected, the FIC produces financial intelligence reports it shares with law enforcement agencies and/or other stakeholders without them being requested,” reads the report.
The top five underlying predicate offences associated with spontaneous disclosures shared by the FIC include tax-related offences, corruption, fraud, illegal deposit taking/Ponzi schemes, and dealing in drugs.
In April this year, NamRA commissioner Sam Shivute said in the previous financial year, the State tax agency managed to collect N$86 billion, of which N$10 billion was paid to taxpayers as refunds.
It was also stated that 235 505 taxpayers are in arrears with NamRA.
What is owed includes a capital amount of N$17 billion, interest worth N$13 billion and penalties of N$49 billion. This adds up to N$79 billion.
Furthermore, the report stated that the FIC has the power to direct banks or any other entity to freeze any account that is suspected of holding the proceeds of crime. The period in which an account can be frozen is for a maximum of 18 working days.
“This period enables the FIC to carry out the relevant enquiries regarding the suspicious transaction(s) and, when necessary, it provides the FIC time to inform and advise the relevant law enforcement agencies or other competent authorities with regard to taking further action in order to secure the funds,” stated FIC.
During the review period, the FIC directed four banks and one asset management entity to freeze 28 bank accounts with a cumulative N$33.1 million, compared with 25 restrictions valued at N$15.4 million recorded in the previous year. This indicates a 105% increase in 2023/2024.
To ensure there no loopholes for government to lose money, finance minister Iipumbu Shiimi said together with NamRA, government will be exploring means to introduce a VAT e-invoicing system to integrate and interface cash registers at businesses to the Integrated Tax Administration System (ITAS).
“This envisaged digitalisation initiative will, among others, improve NamRA’s ability to collect, analyse and monitor tax data, lower administrative and compliance costs while minimising VAT fraud and enhancing tax enforcement,” said Shiimi when delivering his 2024/25 budget statement in the National Assembly.
At the launch of the FIC report, Bank of Namibia governor Johannes !Gawaxab said as Namibia is at a pivotal juncture, marked by the intersection of significant developments in the oil and gas sector and the emergence of green hydrogen in the renewable energy sector, it is imperative to remain vigilant against the inherent risks associated with some of these sectors, including illicit financial flows associated with corruption, money laundering, terrorism, and proliferation financing.
Effective anti-money laundering and combating the financing of terrorism policies and measures are key to the stability and integrity of Namibia’s financial system. -mndjavera@nepc.com.na