Inland Revenue Commissioner, Justus Mwafonge, said on Wednesday that the January introduction of the Integrated Tax Administration System (ITAS) will result in increased revenue for the state as it will minimise incidences of tax evasion, transfer pricing, and underpaying of taxes.
Mwafonge told the Windhoek Observer in an interview that the new system will be a game changer as it will be interfaced with computers from the Ministry of Home Affairs and Immigration, commercial banks, Bank of Namibia, BIPA, the Deeds Office and other important institutions in order to ensure that no individual or company avoids paying tax or underpays their tax contribution.
“It is a useful system because tax administration, tax compliance and tax enforcement is about getting information,” Mwafonge said.
“To enforce tax on people, you need to have a system that will enable you to get information, and that is actually what we are doing with this system.
“With information from home affairs, for example, we’ll be able to see who the foreign people are that work in Namibia who were granted work permits.”
He said before a work permit is granted, a foreign national must already have a tax number and the company that they are coming to work for should have a good standing with the Receiver of Revenue.
Mwafonge said the same process will be followed when foreign nationals want their work permits to be renewed.
The new tax system will also make it possible for the Department of Inland Revenue to know how many properties a person own and how many cars are registered under their name.
“We will go further. We will be able to know the owners of entities or companies registered in Namibia because people tend to hide their identities behind close corporations.
“So that will be valuable information for us to follow up on these individuals and business people, and then of course as we go we will be able to identify other institutions will we need their assistance to get this automatic information or information on request.”
About 37,000 people have so far registered under ITAS from an estimated 600,000 tax-paying population.
The Inland Revenue Commissioner said while the number could be slightly more because there are taxpayers registered under a representative, he is not happy with the pace at which people have been registering as e-filers.
“The number could have reached 100,000 by now,” he said.
He said possible reasons for the slow uptake could be that people are not aware of ITAS and that some might have attempted to register and did not succeed at first and so just quit without trying again.
While others, he said, are just resistant to change.
“Our observation is that those that have registered on the new system appreciate it because it is easy and it brings a lot of convenience as people no longer need to queue at our offices.
“You will be able to serve yourself because you are now able to check whether you are in good standing and whether your VAT or tax returns have been processed, among others”
Because of the new system, the department is now able to deploy its resources into other critical areas such as auditing.
“Tax compliance only comes with audits which can reveal under declaration, tax avoidance, tax evasion, transfer pricing and thin capitalisation,” Mwafonge added.