Going after kapana ladies, hair dressers, shebeen owners and self-employed local plumbers is not the way to save the economy.
The very idea of spending limited resources towards this faulty goal is yet another example of how far removed this administration is from the struggle of the day-to-day lives of the masses.
Anyone knowing people, who live mean in shacks with eight or nine other people as they struggle to earn the day’s bread from hawking their wears or selling fat cakes at a construction site, would never consider demanding taxes from them.
We submit these people, living in poverty, are already paying the biggest tax of all with their lives as the currency of payment.
Most likely, Calle doesn’t know people who send their kids off to school at 6 am to walk kilometres, wearing insufficient clothing against the cold and having breakfast of whatever was unsellable from their mother’s kapana stall the day before.
He has not seen how they live or else he would never conceive of such an absurd taxation plan.
It is contradictory to have a tax collection campaign from a government that would feed the poor with a Food Bank on the one hand and then tax that same community with the other.
There is something wrong in the decision-making halls of government when fliers are sent to struggling informal businesses in Windhoek telling them that from the N$250 they may be lucky enough to earn each day from washing hair, or selling oshikundu, they must send nearly N$40 to the government.
This payment would be in addition to the VAT paid on the supplies and ingredients they must buy each day to produce the end-products that they sell and the taxi money they need to get to town to do business.
The minister of finance is going too far in the wrong direction as he doggedly pursues revenue pennies, while allowing the billions to slide off the taxman’s hook.
What happened to the solidarity tax? Why has government not relentlessly pursued the land tax that would affect the affluent communities in Namibia regardless of legal setbacks?
What about the N$3.5 billion in tax evasion of the president’s former business partner, Jack Huang, and others - why is this legal case not on a fast track?
What is being done to keep the banks from exporting billions of their revenues each year to South Africa?
What is being collected from the Chinese construction companies that send massive amounts of money out of Namibia’s economy? How about going after the taxman’s portion of the hundreds of millions lost with SME Bank, KORA Awards, or GIPF ‘investments’?
Are taxes being collected from the tenderprenuers, 10 percent commission middlemen and fishing quota or hunting/tourism concession beneficiaries?
What about taxing those making windfall profits from S&Ts, board sitting fees, or quickie land deals? What about the tax on foreigners earning income in Namibia that was to be deducted from their consultancy payments?
These lost or uncollected revenues are a large part of why Namibia is a financial basket case, not the man selling traditional chickens in Katutura.
Aside from the absolute ridiculousness of taxing the poor in the informal sector, the logistics of implementing such a program by this bureaucratically overwhelmed government are not in order.
The vast majority of the ‘cash-only-no-receipt’ informal sector is beyond government’s taxation reach anyway.
Inland Revenue’s long-standing inability to keep its regulated individuals and business tax register up-to-date, let alone go after those operating off the taxman’s books, is a story of epic failure.
Certainly, the legality of imposing a presumptive tax will be eventually tested in the courts.
Section 68 of the Income Tax Act may have sections that are comparable to those needed to enable a presumptive tax, but this is not clear.
Someone cannot walk in, subjectively look at a vendor (there are no paper records to examine) assume they earn beyond the N$60,000 threshold, then assume what that income is, and then demand taxes (and impose penalties and interest for late or non-payment).
We are not tax experts, but we have seen nothing in the over-complicated tax codes of this country that allows for any un-gazetted new, specific presumptive taxation criteria to be enforced.
Shebeens across Namibia have long been targeted for controls based on regulations for registration fees, licenses, operating hours, bathrooms, serving alcohol to minors and other things.
This government cannot even consistently and effectively enforce those laws, much less correctly assess and then force informal businesses to pay income taxes.
Citizens owed tax refunds from the 2015 filing are only receiving payments now. Offices of Inland Revenue are besieged with files all over the floors, table tops, desktops and cabinets that lie unattended for months and even years.
The software used does not update payments made in real time nor is it networked throughout the regions.
The better trained tax accountants leave the lower-paying finance ministry jobs in droves, leaving behind those of lesser skill. And yet, this is the government arm responsible for implementing a new program to harass the informal sector into paying taxes?
Every person in political power or law enforcement has a family member, neighbour or comrade operating or benefiting from an informal business that pays no income taxes.
Many decision-makers run such businesses themselves! We are unconvinced that there is sufficient political will for the enforcement of a presumptive income tax.
We think any potential revenues from this hard-working independent-minded sector of the economy will never yield any sort of tax revenues worth the heavy negative backlash that will certainly result.
Just to implement the necessary educational road shows (in all languages) to teach an entire swath of generationally non-tax paying Namibians about the necessity and process of paying income tariffs is beyond the capacity of Inland Revenue.
Calle, the communal conservancy tour guides, small businessmen standing outside of Pupekwitz Megabuild looking for painting or tiling jobs, ladies making cakes for birthday parties, and guys along the Avis Road selling wood crafted furniture, must be left alone.
You have no credible system, ready to be applied nationally to those in the informal sectors in all regions, to impose a presumptive income tax. Rather focus on known income sources and apply all pressure possible.
We recommend that you use Jack Huang’s tax evasion penalties and interest to help the fiscus recover. You are going too far in the wrong direction.