No tax on Katiti millions

FORMER Walvis Bay CEO Augustinus Katiti was not taxed on his multi-million-dollar resignation package, according to an employees’ tax deduction directive from the Directorate of Inland Revenue – something that tax sources say must be a mistake.

The Namibian has acquired copies of documents filed at the High Court by the Walvis Bay Town Council. The Council is the first of four respondents in a lawsuit by the Walvis Bay Residents’ Association (WBRA) related to Katiti’s controversial N$2,8 million golden handshake.Among the documents is a request form for a tax-deduction directive in respect of Katiti’s package, which the Municipality submitted to the Directorate of Inland Revenue.The request in respect of a lump sum of N$2 781 329,90 is dated March 29 2007.Katiti resigned on March 27.His last working day was April 2.On the day Katiti resigned, the Town Council’s Management Committee recommended that Council condone the short notice of resignation, and decided, as “a legally binding agreement between the parties, a full and final lump sum amount of N$2 781 329,90, gross, be paid to the CEO on March 30 2007”.Within a day of the request, the Directorate of Inland Revenue issued an employees’ tax deduction directive acknowledging Katiti’s resignation, and stipulating that he was bound to comply with the directive as stipulated in the Income Tax Act.The directive clearly indicated that Katiti’s remuneration would be taxed at the rate of “N$ ZERO”.The Namibian has contacted a reliable and knowledgeable source at the Ministry of Finance, who said there was no way that any person could get a zero deduction on a resignation package.The source said there had to be “something wrong” with the directive from the directorate.Upon further inquiry, The Namibian spoke to the person who signed the directive.She said at the time the directive was made out, there was no indication of tax being deducted and that is why the “zero” was entered.She added that, after the directive was issued, the tax due was recalculated and Katiti was informed that he would have to pay N$945 652,17.The clerk could not say whether Katiti had paid the tax yet.She could also not say whether a new directive had been issued stating the correct amount of tax.The WBRA lawsuit is challenging the Walvis Bay Town Council on alleged irregularities with regards to Katiti’s payout.The association is also demanding more transparency from the council, saying that ratepayers have the right to be informed how the council spends their money.The Town Council indicated last month that it would defend the case in the High Court.The Council is the first of four respondents in a lawsuit by the Walvis Bay Residents’ Association (WBRA) related to Katiti’s controversial N$2,8 million golden handshake.Among the documents is a request form for a tax-deduction directive in respect of Katiti’s package, which the Municipality submitted to the Directorate of Inland Revenue.The request in respect of a lump sum of N$2 781 329,90 is dated March 29 2007.Katiti resigned on March 27.His last working day was April 2.On the day Katiti resigned, the Town Council’s Management Committee recommended that Council condone the short notice of resignation, and decided, as “a legally binding agreement between the parties, a full and final lump sum amount of N$2 781 329,90, gross, be paid to the CEO on March 30 2007”.Within a day of the request, the Directorate of Inland Revenue issued an employees’ tax deduction directive acknowledging Katiti’s resignation, and stipulating that he was bound to comply with the directive as stipulated in the Income Tax Act.The directive clearly indicated that Katiti’s remuneration would be taxed at the rate of “N$ ZERO”.The Namibian has contacted a reliable and knowledgeable source at the Ministry of Finance, who said there was no way that any person could get a zero deduction on a resignation package.The source said there had to be “something wrong” with the directive from the directorate.Upon further inquiry, The Namibian spoke to the person who signed the directive.She said at the time the directive was made out, there was no indication of tax being deducted and that is why the “zero” was entered.She added that, after the directive was issued, the tax due was recalculated and Katiti was informed that he would have to pay N$945 652,17.The clerk could not say whether Katiti had paid the tax yet.She could also not say whether a new directive had been issued stating the correct amount of tax.The WBRA lawsuit is challenging the Walvis Bay Town Council on alleged irregularities with regards to Katiti’s payout.The association is also demanding more transparency from the council, saying that ratepayers have the right to be informed how the council spends their money.The Town Council indicated last month that it would defend the case in the High Court.