Windhoek-Analysts have welcomed what has been termed ‘a second and last tax amnesty’ by the Ministry of Finance but have expressed concern about the programme achieving its intended objective given the depressed state of the domestic economy.
The second tax amnesty started yesterday after only about N$243 million, or approximately six percent of the N$4 billion owed to the state in taxes, was collected during the first tax amnesty that started in February this year.
“We view it as a complementary effort to improve the state of the fiscus. However, while we note that the ministry has only managed to collect less than a quarter of the arrears with the implementation of the previous tax amnesty, we believe that the new initiative may prove difficult in realizing its optimal objective as the economy continues to slow as evidenced by a declining growth in private sector credit extension,” said Frans Uusiku, an economist at stock brokerage Simonis Storm Securities.
Ngoni Bopoto, a research analyst at Namibia Equity Brokers, believes the second tax amnesty is generally a positive move. “We believe it will be more effective to persuade people to come under the taxman’s radar through the amnesty programmes, rather than continue lurking in the shadows fearing reprisal. Its success will depend on Treasury’s ability to motivate those with outstanding payments and improve on the 6 percent success rate of the initial amnesty. A post-mortem of the first amnesty is essential to determine a plan of action to meaningfully increase the collection rate,” said Bopoto.
Bopoto added that increased disclosure in respect of public projects and progress towards fiscal targets are ideal themes that the government can communicate in order to raise awareness of the importance and encourage payment of outstanding taxes.
Known as the Tax Arrear Recovery Incentive Programme, the second amnesty will apply to all taxes administered by the Inland Revenue Department, including income tax, value added tax (VAT), VAT import, employees tax, stamp duty, non-resident’s shareholders tax and tax on royalties.
“Taxpayers who choose not to partake in this incentive programme shall become liable for the full payment of taxes and interest owing to the Receiver of Revenue. The Inland Revenue Department will impose the full extent of tax laws through the recovery provisions, which include attachment of assets, appointment of agents and recovery of tax from third parties,” said Ericah Shafudah, Permanent Secretary in the Ministry of Finance when she announced the second tax amnesty.
The aim of the tax amnesty is to collect all outstanding taxes owed to the state and to offer a limited-time relief to taxpayers with outstanding tax balances to settle their capital amounts in full, and pay only part of their interest charges.
The ministry will waive the penalties levied on tax payments and submission of tax returns, and write off 70 percent of the interest balance on all tax accounts for taxpayers who pay the capital tax amount in full and 30 percent of the interest balance. There shall be no write-off of any capital amount. New Era Reporter
2017-09-12 09:48:25 | 2 years ago