MoF to accept Bank Guaranteed Cheques for tax liabilities

In a tax bulletin released this week, auditing firm Ernst and Young Namibia (EY) informed its clients that Inland Revenue, a directorate under the Ministry of Finance will now require tax payers  to pay for tax liabilities via Bank Guaranteed Cheques. Said EY in the bulletin, “as from 1 December 2015, Inland Revenue will therefore only accept cheques for tax payments that are bank guaranteed by any commercial bank. This requirement will lead to additional bank charges for taxpayers. Added EY, “Inland Revenue encourages taxpayers to use online bank facilities to make payment by means of Electronic Fund Transfer (EFT). Payments can also be made by using point of sale devices that are available at offices country wide. Cash payments can still be made to settle any tax debt but this method of payment is not encouraged for safety reasons.” Elaborating further, EY said, “On the basis that the limit for cheque payments will be reduced to N$100 000 with effect from 1 February 2016 and phased out by 31 December 2017, taxpayers are encouraged to use on line banking facilities to make payments to Inland Revenue.” eanwhile, EY also briefly touched on a recent announcement by the Payments Association of Namibia that payments by cheque would be limited to N$100000 with effect 1 November 2016. “The Payments Association of Namibia recently issued a notice to advise taxpayers that the item. limit for cheque payments will reduce to N$100 000 with effect from 1 February 2016. It also advised that the anticipated date for the phasing out of cheques as a method of payment is expected by 31 December 2017. Banking institutions will not accept cheque payments in excess of N$ 100 000 for processing after 1 February 2016. The last day for depositing cheques exceeding the N$100 000 item limit at any bank is 15 January 2016. No cheques in excess of N$ 100 000 should therefore be deposited at any bank after this date,” said EY. Encouraging its clients to embrace technology, EY said, “Spilt payments in respect of payments in excess of the N$100 000 cheque item limit are a contravention of the current payment rules and will not be allowed. The Payments Association of Namibia encourages all payments in excess of the N$100 000 cheque item limit to be made by using online banking facilities.”