NIPA requests extension on taxpayer amnesty
With less than a week left for taxpayers in arrears to pay, the Namibia Institute of Professional Accountants (NIPA) has requested an extension on the amnesty for all taxpayers in the country.
NIPA extended the request this week in the wake of an announcement made by the Ministry of Finance, concerning the tax recovery programme for taxpayers’ arrears which will end this month on 31 July.
“We believe it is very difficult for taxpayers to participate in the incentive scheme, as to qualify, the exact capital amount and payment is required by 31 July before they can apply for amnesty. Many taxpayers are unaware of the amount they owe, as they have not been assessed and assessment is a lengthy process,” said the CEO of NIPA, Essie Herbst.
Demonstrating concern not only for taxpayers, but for all businesses, their future and families, Herbst said that the smaller business market represents about 10% of GDP, contributing to 46% of the employment market and 21% of households in Namibia.
According to Herbst the country’s economy is severely traumatised by the recession and that its focus has been to survive the negative impact on cash flow and retain their employees. “Many smaller businesses have already closed since January this year and some are soon to face closure,” she added.
Furthermore, NIPA in consultation with its 178 members, has recently received an overwhelming response from close to 20,000 taxpayers, who have said they do not understand the incentive programme, but once explained, indicated that they would like to participate, yet they do not qualify to apply.
NIPA has recommended that payment of outstanding debt by taxpayers currently registered under the scheme to have time extended to 31 December 2018 to settle debt. “We believe that most taxpayers want to pay, but do not have the financial means to settle full amounts immediately. All taxpayers should be granted the opportunity to register for the scheme, irrespective of whether all returns have been submitted or when the outcome of the assessment and objections are still unknown. These measures are necessary to determine the correct liability due to the Inland Revenue and are also essential for the updating of taxpayer records,” he added.
Advising taxpayers, NIPA has also urged individuals and businesses to come forward, make the capital payments and apply for the incentive programme. “If they know their affairs are not in order, they should approach a professional accountant for assistance,” Herbst said.
Providing an alternative solution to addressing tax payments in Namibia, NIPA proposes that the Ministry of Finance broaden the taxpayer base, instead of adding more of the burden to the current taxpayer base.
“With a population of 2.48 million people as per the latest population statistics issued by the Namibian Statistics Agency, our predications are that close to 400,000 taxpayers are bearing the weight of paying tax in the country. We also estimate that there are at least 250,000 individuals that are not registered for tax, who could and should be contributing to the tax base,” added Herbst.
Herbst said that as a professional body representing accountants in Namibia, NIPA’s mandate is not only to look after the interests of the profession and its members, but the consumer market, which consist of individuals and businesses.
NIPA is committed to assisting the government in achieving its goal of collecting outstanding debt and updating the current tax system, before the change over to the new online filing system (ITAS) in the upcoming financial year. The institution also highlights the essential need to bridge the gap between the Receiver Inland Revenue and identify a workable solution between the taxpayer, Receiver of Inland Revenue and the accountants.