Problems with VAT processing

– for the record –

Part 1 in a series of 2
Based on an interview with the Institute of Commercial and Financial Accountants of Namibia

Registered taxpayers have complained to various bodies as well as to their professional accountants and have at numerous stages requested that something should be done about the processing of VAT submissions and claims.
Taxpayers frequently complain that most people employed in the Department of Inland Revenue lack the capacity to carry out their jobs. The constant changing of the systems in the department also adds to the frustration. Recently Inland Revenue sent VAT returns back, refusing to accept them because the banking details were not disclosed. Strangely that data is already on the VAT application, and thus at Inland Revenue. Surely, if the data is inhouse, this type of action is irresponsible. What happens if that return is now late? Penalty and interest for data that is at Inland Revenue?
A taxpayer stated that due to the actions of Inland Revenue, millions of dollars are lost to the economy. Professional accountants have tried to resolve tax challenges within a forum, but the taxpayers rightly or wrongly openly question the efficiency of that forum.
The forum is known by taxpayers as the Group 5. It consists of: A member of the Institute of Chartered Accountants of Namibia, a member of the Institute of Commercial and Financial Accountants of Namibia, the Permanent Secretary of Finance who also chairs the meeting, the Director of Finance – Inland Revenue, and a member of the Association of Black Accountants of Namibia.
They meet every three months, and their members feel that they have made huge progress. “We are moving in the right direction” is their comment.
Tax changes in December 2011 are a point in case. Why could all these changes not be discussed with people in the industry? The taxpayers believe there are suitably qualified people in commerce to make a meaningful contribution and to ensure new legislation is applicable and effective in the economic context of African countries.
Next week: The Challenges with VAT.