It has emerged that the bureaucratic process of government procurement has stalled the appointment of the much-awaited Commissioner to head the planned, Namibia Revenue Agency (Namra).
This comes as it emerged that the seven-member Namra board headed by Anna Nakale-Kawana failed to meet its January target as set out by Finance minister, Calle Schlettwein when it was appointed last year because the selection process of a recruitment agency to lead the selection was still to be finalized.
The delays in the government procurement process has seen the appointment deadline moved to May to enable the snail-paced government procurement process to complete its work.
“For the purpose of recruiting the Commissioner of the Agency, the Ministry intends to acquire the services of a recruitment contractor to ensure an independent and transparent process. Acquiring such services follows the procurement process. We are still engaged with this process in terms of the national procurement law. Once finalized, this will set us on course to commence, starting with the recruitment of the Commissioner.
The recruitment of the Commissioner thus expected to be finalized sometime in May 2019 or earlier. In this regard, the Board did not fail in its task per se, but it is the time duration it takes to complete key dependency activities, in this case the hiring of the recruitment entity to facilitate the process,” the Finance minister said.
The alignment of the laws that will operationalize the revenue authority have emerged to have now pushed back the resumption of its operations from 1 March 2019 as initially pronounced, to 1 October 2019.
“We started off with the implementation of the legally binding transitional activities within the framework of the legal opinion obtained in November 2018. Such legal basis obtains from the Interpretation of Laws Proclamation, which provides for the undertaking of necessary activities to bring the NamRA law into operation. It is within this framework that the preparatory activities are initiated because the NamRA Act (Act No. 12 of 2017) does not provide for different dates for bringing different sections of the law into force,” Schlettwein said.
“This is for the practical purposes of ensuring that key transitional steps are completed and operational readiness is achieved. A smooth transitional phase is envisaged to allow for adequate stakeholder consultation and operational readiness such that there is no disruption to revenue collection and trade facilitation functions and due processes are not compromised.”
The Finance minister was quick to dismiss speculation that the delayed operationalization of Namra could hamper government’s efforts to meet set revenue collection targets, noting that the proposed revenue authority would mainly bring efficiency to the provision of customs and excise services.
“The Government has, in general, been able to meet the revenue targets with collection rates that are above regional averages. Our revenue collection rate stands at about 32 percent of GDP, inclusive of SACU receipts or some 22.1 percent less SACU remittances. This is seen against the Sub-Saharan average collection capacity of about 17 percent,” he said.
“The set collection targets for the year only take into consideration the implemented measures, not the measures which are yet to be implemented such as the announced tax policy changes or the revenue Agency reform. Thus, no under-recoveries are expected due to the Agency having not taken off in relation to budgeted collection targets. Nevertheless, the envisaged coming into operation of the Agency is expected to bring about added momentum to collection activity and effort, greater fairness and compliance by reaching out to all potential taxpayers as well as to deter and eliminate tax planning opportunities. The preparatory phase for Namra also entails the preparation of the business strategy for the agency, which will comprise the revenue collection targets under the new dispensation.”
The agency’s which is envisaged to be an autonomous body, will adopt its own internal policies, including, financial, IT, procurement, risk management, and human resources policies as it seeks to attract and retain critical skills, and be funded through government budget appropriations, based on costed and prioritised programmes.
Taxes in Namibia have consistently been a main revenue source for government, and in 2017, they accounted for over 57 percent of total government revenue of N$58.5 billion.
Currently, two departments, customs and excise and Inland Revenue, collect taxes on behalf of government.