Receiver’s mindset change affects all of us

THERE has been a significant mindset change at the Receiver of Revenue over the last 18 months.This change will affect all of us and the impact of the change can only be good for the country. The Receiver of Revenue is not the most loved person in the world.

Taxes must be collected from us to ensure the Government has funds to spend on what it deems necessary. The Receiver therefore tries to collect as much tax as possible and the taxpayers try to pay as little as possible.The net result is that the Receiver is always suspecting the worst – has the taxpayer done me in when the tax form was completed? Both the Income Tax Act and the Value-added Tax Act have provisions that impose heavy penalties when a taxpayer evades tax or fails to pay tax when it is due.These provisions encourage taxpayers to comply with the law.There are, however, still taxpayers that like to live on the edge and they take chances with the hope of never being caught.The bad news for these taxpayers is that things have now changed at the Receiver of Revenue.The Ministry of Finance has taken a decision that expertise will be hired where their own skills are lacking to challenge taxpayers who are guilty of tax evasion.Up to now the Receiver’s audit function has been very limited and most taxpayers were able to “pull the wool” over the Receiver’s eyes without the Receiver even realising it.The joy ride that taxpayers have had up to now has come to an end.You must expect that the Receiver will challenge you and if you are caught, expect the worst.The Receiver will come down hard on you unless there are very good explanations for your behaviour.The Receiver has a very tight rope that it must walk on – it is not easy to keep the balance between being too hard on taxpayers and being to soft on them.Up to now the odds were probably heavily stacked in favour of the taxpayer.The latest initiative of hiring expertise when needed is only one measure that has been put in place to get the balance between the taxpayer and the Receiver right.The Minister of Finance and the Receiver of Revenue must make sure that the pendulum does not swing so far the other way that taxpayers are forever living in fear of being victimised.Entrepreneurial flair should not suffer because of an over-aggressive tax authority.We are far from that position in Namibia but all of us should take note of the mindset change that has taken place at the Receiver of Revenue.Should readers have queries, they are invited to send them to cameron.kotze@za.ey.com.The Receiver therefore tries to collect as much tax as possible and the taxpayers try to pay as little as possible.The net result is that the Receiver is always suspecting the worst – has the taxpayer done me in when the tax form was completed? Both the Income Tax Act and the Value-added Tax Act have provisions that impose heavy penalties when a taxpayer evades tax or fails to pay tax when it is due.These provisions encourage taxpayers to comply with the law.There are, however, still taxpayers that like to live on the edge and they take chances with the hope of never being caught.The bad news for these taxpayers is that things have now changed at the Receiver of Revenue.The Ministry of Finance has taken a decision that expertise will be hired where their own skills are lacking to challenge taxpayers who are guilty of tax evasion.Up to now the Receiver’s audit function has been very limited and most taxpayers were able to “pull the wool” over the Receiver’s eyes without the Receiver even realising it.The joy ride that taxpayers have had up to now has come to an end.You must expect that the Receiver will challenge you and if you are caught, expect the worst.The Receiver will come down hard on you unless there are very good explanations for your behaviour.The Receiver has a very tight rope that it must walk on – it is not easy to keep the balance between being too hard on taxpayers and being to soft on them.Up to now the odds were probably heavily stacked in favour of the taxpayer.The latest initiative of hiring expertise when needed is only one measure that has been put in place to get the balance between the taxpayer and the Receiver right. The Minister of Finance and the Receiver of Revenue must make sure that the pendulum does not swing so far the other way that taxpayers are forever living in fear of being victimised.Entrepreneurial flair should not suffer because of an over-aggressive tax authority.We are far from that position in Namibia but all of us should take note of the mindset change that has taken place at the Receiver of Revenue.Should readers have queries, they are invited to send them to cameron.kotze@za.ey.com.