The Ministry of Finance is investigating another VAT scam involving briefcase companies that claimed refunds from the Department of Inland Revenue based on fictitious invoices, Finance Minister, Calle Schlettwein, announced this week.
In an interview with the Windhoek Observer, the minister said he could not reveal the amount and the companies involved as the matter is still under investigation.
“This matter is under investigation. It is not proper to discuss the details for now because it could jeopardise our investigation. Once we have some details we will share that with you,” Schlettwein said.
Last week, the Windhoek Observer reported that the Ministry of Health and Social Services stands accused of paying close to N$1 billion dollars inclusive of Value Added Tax (VAT) to four different companies that are not registered for tax.
The ministry made payments of N$981 million inclusive of VAT to four unnamed companies that are not registered with the Department of Inland Revenue, but yet charged the ministry VAT on their invoices.
Calculations by the Windhoek Observer show that the Receiver of Revenue could have been prejudiced close to N$150 million through the scam.
Another tax related case that is currently before the courts involves several people including Chinese businessman, Jack Huang, who are accused of tax evasion, fraud and money laundering to the tune of N$3.5 billion.
The government has been intensifying its tax collection methods by reinforcing collection and proposing the introduction of new taxes.
“In the bid to achieve greater equity and fairness in the administration of the tax system we have, of recent, embarked on different initiatives such as lifestyle audits, auditing of multinational companies including mining and fishing companies aimed at ensuring tax compliance of all individuals, businesses, companies, close corporation, partnerships and other entities,” Schlettwein said at a press conference this week.
He said the initiatives are being undertaken for all registered and non-registered persons irrespective of their nationality and background.
“We shall not relent on this front. Non-registration does not protect anyone from tax obligations and it is an offense in terms of tax laws,” he said.
He said to date, 381 foreign-owned small and medium businesses trading in second hand cars, cell phones, watches, clothing and accessories were visited during the country wide ‘Operation Sunrise.’
“As a result, 217 new taxpayers were registered and assessments to the value of N$50 million were raised,” he said.
The finance ministry recently conducted a tax amnesty programme, which netted N$1.3 billion out of N$4 billion, which the government estimates was owed in unpaid tax.
Figures in the 2018/2019 budget show that total revenue was revised upward to N$56.7 billion from N$ 56.4 billion in the 2017/2018, due to better collections.