Hertta-Maria Amutenja
The High Court has ruled that the Namibia Revenue Agency (NamRA) must refund N$1.2 million to Obie Logistics (Pty) Ltd after it unlawfully withheld the tax refund to offset a N$53 million debt owed by a separate company, Obie Transport.
NamRA’s action was based on Section 83D of the Income Tax Act, of 1981, which was amended in 2015 to allow the agency to recover unpaid taxes from company directors.
However, the court ruled that the law could not be applied retroactively and that Obie Logistics could not be held responsible for debts from another company that was already liquidated.
According to court documents, the N$53 million tax liability was incurred by Obie Transport in the early 2000s, long before the 2015 amendment.
The company has since been liquidated, and the court found that the liability belonged to an entity that no longer existed.
“There is no legal basis to set off a refund due to one company against the liabilities of another, particularly when the latter no longer exists,” the ruling stated.
Obie Logistics is a Namibian-based company that specialises in cross-border transportation between Namibia, South Africa, Zimbabwe, Zambia, and Botswana.
The company has years of experience in cross-border transport and documentation, offering services such as reefer cargo transport. Its head office is located in Upington, Northern Cape, South Africa.
An accountant from a local accounting firm, who requested anonymity, said it is a critical ruling for business owners and tax professionals.
“This judgement reinforces the principle that each company is legally distinct, even if owned by the same individual. It is a critical ruling for business owners and tax professionals because it confirms that debts cannot be transferred between entities without clear legal grounds.”
The accountant further explained that tax collection authorities must follow due process and ensure that they act within the boundaries of the law.
“While tax compliance is important, tax authorities should not take shortcuts that disregard the legal separation of companies. This ruling serves as a reminder that every entity must be treated independently, and directors cannot automatically be held liable for company debts unless explicitly provided for in the law.”
The court ordered NamRA to process the refund within 60 days.
NamRA has not yet indicated whether it will appeal the ruling.
Namra had not responded to any questions by the time this article was published.
This ruling comes amid ongoing legal battles involving NamRA, including a case brought by Zhong Mei Engineering Group.
In 2023, Zhong Mei challenged NamRA in the High Court after the tax agency ordered Standard Bank to garnish N$33 million from the company’s account over unpaid taxes from 2013 to 2018.
The company argued that NamRA’s assessments were unlawful and that the garnishing order was issued while negotiations to settle the debt were ongoing.
Zhong Mei claimed that NamRA acted arbitrarily by deducting the funds despite the company offering to pay N$2 million upfront and the rest in instalments.
The company further argued that the deductions left it unable to meet financial obligations, including a Supreme Court-ordered payment of N$4 million.
NamRA, however, maintained that Zhong Mei had filed zero income tax returns despite earning substantial income during the period under review.
The agency argued that its actions were lawful and that the company failed to provide adequate explanations for discrepancies between its financial statements and tax filings.
