Producer impact due to late payment for cattle

The Livestock Producers Organisation (LPO) says it has engaged the Namibia Revenue Authority (Namra) on behalf of its members who are under obligation to remit output Value Added Tax (VAT) to the authority.

According to the latest issue of the Namibia Agricultural Union newsletter, this stems from the recent crisis faced by Meatco producers due to late payment for cattle delivered to Meatco’s abattoir.

“Since the VAT Act requires that output VAT 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,” said NAU in the newsletter.

The newsletter added that LPO, a NAU affiliate, approached Namra on 10 October to address the challenges faced by the producers.

Namra acknowledged these challenges last week, but stated that it needs to follow its mandate to comply with the VAT Act provisions.

According to the provisions of Section 7 of Act 10 of 2000, “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”.

In order to alleviate the impact, Namra encourages taxpayers with outstanding tax balances due to cash flow constraints, to visit their offices to arrange for the settlement of the outstanding balances.

According to Namra, 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 1 April 2023 to October 2024 to assist taxpayers to settle tax arrears.

“The programme includes the writing off of 100% of the interest and 100% of the penalties incurred, provided the taxpayer pays the capital debt and meets the requirements stipulated in the tax amnesty programme,” Namra noted.

The LPO believes these measures will assist them to better manage the current crisis.
– Email: matthew@namibian.com.na