Hundreds of local commercial livestock producers are in trouble with the Namibia Revenue Agency (NamRA) for failing to honour their output VAT on time, while others just did not pay up.
The farmers’ inability to pay their output VAT to NamRA is being pinned squarely on Meatco’s failure to honour its payments to about 245 commercial farmers, to whom the entity owes an estimated N$320 million for cattle delivered to its abattoirs.
To remedy the situation, the Namibia Agricultural Union (NAU), on behalf of the Livestock Producers Organisation (LPO), recently met with NamRA’s leadership to try and explain the root cause of the delayed VAT payments by the farmers and how the union is hard at work trying to rectify the issue with Meatco.
“NamRA also encouraged taxpayers and our farmers with outstanding tax balances due to cash flow constraints, to visit their office to arrange for the settlement of their outstanding balances. Settlement arrangements can be made for a maximum of 12 months. It is important to note that overdue balances attract interest and penalties.”
“A tax amnesty programme is running from 01 April 2023 until October 2024 assisting taxpayers to settle tax arrears. The said programme includes the writing off 100% of the interest and 100% of the penalties incurred, provided that the taxpayer pays the capital debt and meets the requirements stipulated in the tax amnesty programme,” said NAU in a press statement, obtained by AgriToday.
As per the agreement with the farmers, Meatco was expected to make payment within 30 days of delivery, but payments have been somewhat slow and, in some cases, not forthcoming at all.
This has placed farmers is a precarious situation with NamRA, which is known for its ruthless and uncompromising stance when it comes to cases of tax evasion.
Since the VAT Act requires that output VAT must be declared on the date of invoice and not the date of payment, producers are under obligation to remit output VAT from Meatco to NamRA even before the output VAT has been received from Meatco.
According to NAU, NamRA explained that the provision of Section 7 of Act 10 of 2000 makes it clear that a supply of goods or services shall, except as otherwise provided in this section, be deemed to take place at the time the invoice in respect of that supply is issued by the supplier or the time any payment in respect of that supply is received, whichever is earlier.
The LPO is affiliated to NAU. Its members include commercial livestock producers who are members of farmers’ associations. The mission of the LPO is to be a financially independent organization, representing all commercial producers in Namibia and to be internationally recognised.