Tax revenue up after anti-corruption drive

TAX revenues have increased by N$1,161 billion for the fiscal period ending January 2006 since the Ministry of Finance started doing audits of their satellite Oshakati offices, Permanent Secretary of Finance Calle Schlettwein announced yesterday.

“Our stance of zero tolerance for tax evasion remains firm” and ongoing, and would be extended to the Windhoek Regional Tax Office, he said in a press release. The tax audit was launched in the wake of the sudden collapse of the Santa Clara bonded warehouse complex late 2004 and revelations by The Namibian of the high-flying lifestyles of certain key tax officials in the Oshakati office in March last year.The biggest gain has been in Value Added Tax (VAT), which has increased by N$600 million since the audit led by auditors Ernst & Young and KPMG started late last year, Schlettwein said.”Apart from the fact that income tax on individuals and companies increased significantly, VAT, when compared to the previous fiscal period, has shown a growth of nearly N$600 million until the end of January,” Schlettwein said.”VAT has declined in the previous years, which no doubt reflects the evasion that was prevalent during that time.”Income tax paid by individuals increased by N$206 million, while company taxes have increased by N$355 million, he said.Altogether, this amounted to N$1.161 billion in taxes that were previously not paid, much of it lost to fraud, round-tripping and tax evasion.It was not immediately clear what portion of the N$1,161 billion was collected by the Revenue Offices at Oshakati, Ondangwa and Oshikango, where a growing informal economy has boomed since Independence.”With regards to Customs and Excise, we unearthed a number of cases where officials work together with businessmen in order to do ’round tripping,’” the illegal export of goods on paper but which goods were then sold inside Namibia, Schlettwein said.”This misconduct is still under investigation.Such practices are fraudulent and they will be treated as such.”Government’s tax audit will now be extended to all other regional offices in Namibia, starting in Windhoek this month, Schlettwein further stated.”The Windhoek Regional Tax Office will be subjected to a comprehensive forensic audit as well,” which will be led by Head of the Ministry of Finance’s Legal Unit, Jack le Roux.Windhoek taxpayers could now also expect visits from Le Roux and his team, which would be made up of 16 private auditing companies, Schlettwein said.Le Roux can be contacted at (061) 209 9111, or by e-mail jleroux@mof.gov.na, and all information would be treated with the highest degree of confidentiality, Schlettwein said.Schlettwein also alluded to the fact that the team that originally investigated the Oshakati, Ondangwa and Oshikango tax offices faced severe intimidation at the time, where they operated under constant Police protection.”I will neglect my duty if I don’t extend my gratitude to the consortium (Ernst&Young and KPMG) for a job well done thus far,” he said.”In conclusion I would like to thank those who comply and trough their contributions assist to make Namibia a better place for Namibians but warn those who do not comply not to expect mercy,” Schlettwein stated.* John Grobler is a freelance journalist; 081 240 1587 0The tax audit was launched in the wake of the sudden collapse of the Santa Clara bonded warehouse complex late 2004 and revelations by The Namibian of the high-flying lifestyles of certain key tax officials in the Oshakati office in March last year.The biggest gain has been in Value Added Tax (VAT), which has increased by N$600 million since the audit led by auditors Ernst & Young and KPMG started late last year, Schlettwein said.”Apart from the fact that income tax on individuals and companies increased significantly, VAT, when compared to the previous fiscal period, has shown a growth of nearly N$600 million until the end of January,” Schlettwein said.”VAT has declined in the previous years, which no doubt reflects the evasion that was prevalent during that time.”Income tax paid by individuals increased by N$206 million, while company taxes have increased by N$355 million, he said.Altogether, this amounted to N$1.161 billion in taxes that were previously not paid, much of it lost to fraud, round-tripping and tax evasion.It was not immediately clear what portion of the N$1,161 billion was collected by the Revenue Offices at Oshakati, Ondangwa and Oshikango, where a growing informal economy has boomed since Independence. “With regards to Customs and Excise, we unearthed a number of cases where officials work together with businessmen in order to do ’round tripping,’” the illegal export of goods on paper but which goods were then sold inside Namibia, Schlettwein said.”This misconduct is still under investigation.Such practices are fraudulent and they will be treated as such.”Government’s tax audit will now be extended to all other regional offices in Namibia, starting in Windhoek this month, Schlettwein further stated.”The Windhoek Regional Tax Office will be subjected to a comprehensive forensic audit as well,” which will be led by Head of the Ministry of Finance’s Legal Unit, Jack le Roux.Windhoek taxpayers could now also expect visits from Le Roux and his team, which would be made up of 16 private auditing companies, Schlettwein said.Le Roux can be contacted at (061) 209 9111, or by e-mail jleroux@mof.gov.na, and all information would be treated with the highest degree of confidentiality, Schlettwein said.Schlettwein also alluded to the fact that the team that originally investigated the Oshakati, Ondangwa and Oshikango tax offices faced severe intimidation at the time, where they operated under constant Police protection.”I will neglect my duty if I don’t extend my gratitude to the consortium (Ernst&Young and KPMG) for a job well done thus far,” he said.”In conclusion I would like to thank those who comply and trough their contributions assist to make Namibia a better place for Namibians but warn those who do not comply not to expect mercy,” Schlettwein stated.* John Grobler is a freelance journalist; 081 240 1587 0