Africa-Press – Namibia. LABOUR researcher Herbert Jauch says the Namibia Revenue Agency’s (Namra) decision to write off interest and penalties amounting to over N$53 billion by October next year will go a long way in providing relief to struggling small businesses and individuals.
The measure forms part of the government’s final extension tax amnesty programme, which seeks to recover the capital tax debt, currently at N$15,9 billion.
As at last December, outstanding tax penalties stood at N$42,5 billion and interest at N$11,4 billion.
“Once the qualifying conditions have been met, Namra will write off all interest and penalties levied on taxpayers with outstanding tax balances,” Namra spokesperson Steven Ndorokaze said.
The amnesty programme will replace the current modified electronic filing tax relief programme, commencing on 1 April and ending on 31 October 2024.
Jauch says writing off debt can be justified in cases where individuals or organisations are struggling to survive.
“However, if the debt write-off also covers corporations and allows them to avoid paying taxes, which are urgently needed to fund important services, then it is a problematic move,” he said.
“Given the rising cost of living and the enormous levels of unemployment, this measure will assist lower middle-income earners to use their small incomes to keep themselves and their families/households afloat. This essentially will affect people earning around N$8 300 or less per month, and in my view is justified. Their incomes hardly suffice to meet basic needs of a household and thus it is justified to exempt them from paying income tax,” said Jauch.
Ndorokaze said the amnesty programme will encourage taxpayers to pay their debts and reduce the tax debt burden on the economy.
During the first phase of the tax relief programme from 1 June to 30 November 2022, a total 36 653 taxpayers registered, and most have made payments.
Namra has generated N$619 million from taxpayers who participated in the relief programme, including business entities and 7 781 taxpayers.
An amount of N$127 million was transferred from credit balances to settle tax debts and total revenue generated, inclusive of hard cash and credit transfers, amounts to N$747 million.
As per the relief programme, Namra wrote off N$244 million in interest and reversed penalties totalling N$6,9 billion.
Ndorokaze said this was done on accounts where the capital was either settled in full, or no capital was due and payable.
“For the initial electronic filing tax relief programme, which ended on 31 January 2022, N$1,3 billion was collected,” Ndorokaze said.
The amnesty programme kicking off next month was announced by finance minister Iipumbu Shiimi during the tabling of the 2023/2024 national budget last month.
Shiimi said the upcoming amnesty programme will be the last, and all concerned taxpayers should participate before 31 October 2024.
“Afterwards, there will be no more mercy,” Shiimi said.
“We encourage those taxpayers with outstanding arrears to utilise the recoveries in their incomes to settle their tax liabilities while the window of relief remains open.”
Another relief initiative is the removal of income tax for low-income earners.
Starting in the 2024/2025 financial year, the government has resolved to remove tax for individuals in the N$50 000 to N$100 000 tax bracket, however, the implementation modalities of the envisaged tax relief for low-income earners is yet to be outlined.
INDUSTRY HAPPY
Namibian Chamber of Commerce and Industry (NCCI) chief executive officer Charity Mwiya says the decision by Namra aims to benefit businesses in general, irrespective of the size or sector in which they operate, or the town or region.
“NCCI not only supports this action, but is motivated and has initiated engagements with the government in 2019 already, as a business sector recovery and resilience strategy. Adjusting PAYE taxation bands was NCCI’s recommendations to the government over the past three years. So, we welcome the long awaited move. Viewed more broadly, it leaves lower-income earners with more funds for daily needs or to save for their old age,” she says.
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