About N$36 million has been discovered through a high level 90-day investigation to have been defrauded from the Namibia Revenue Agency (NamRA) through provisional tax refunds, a double increase from the N$15 million announced earlier in March, before the agency moved to effect a moratorium on refunds in an effort to crack down on fraudsters.
The moratorium has however been lifted as of today, according to NamRa’s commissioner Sam Shivute, who said the agency is now working towards cracking down on those involved and recoup the misappropriated millions.
The investigations began in March when it was discovered that N$15 million was paid out in refunds to underserving recipients through fraudulent and manipulation of the system. It is alleged that, individuals tax payers’ profiles were changed to provisional status of farmers by mostly tax payer representatives or bookkeepers; which is associated with tax payers earning an income from sources additional to their employment such as farming.
Subsequently, the revised returns would be submitted with inflated deductions, which then result in tax refunds becoming due to the alleged affected tax payer, explained the agency during a press conference held today.
So far 10 criminal cases have been registered with the police, as 409 alleged fraudsters from 17 institutions are linked to the scam are identified, with the possibility of more being nabbed as the figure is likely to surpass the N$36 million. Of the 17, five are big institutions of which investigations are yet to be concluded.
“The good thing is that the targeted people involved in the scam are all employed either in the private or public sector, so they are known and give us the guarantee to recover all the amounts. A moratorium will have been linked to their name, so that even if they resign, die or retire there will be no way they can evade as we have to issue a tax directive in order for their pension to be paid out. So have complete assurance of a total recovery,” vowed Shivute.
Although he said nothing has been recovered yet despite having identified the culprits which involves five of the agency staff members, one of which has retired, another is on suspension and the remaining are still being investigated.
“We will recover the money, we are certain, the only delay why we have not done so was because the decision was done recently. So in two weeks-time we will start issuing letter of notices to the employers of the alleged scammers, so that deductions and repayments can begin,” he said.
Furthermore, he said, NamRa will enforce section 91 of the income Tax Act 24 of 1981 to recover paid funds where the facts show no basis of such claims. This will be done through the appointment of debt collectors and employers as collecting agents. “We do not care whether you received the refunds knowingly or not, we are coming for you to retrieve what is ours,” vowed Shivute.
The commissioner said, as of February 2022, total of 43 166 natural persons were registered as provisional tax payers, as deriving an income which does not constitute remuneration. And from March 2018 to February 2022, only 6268 of the tax payers claimed and received tax refunds for the different types of taxes worth N$950 million.
“N$496 million was in respect of income tax refunds paid to 4746 tax payers, who happen to be our target group. This group of tax payers remain the subject of the continuing investigation which in some instances has been concluded and criminal cases have been lodged with the police,” said Shivute.
Asked if instituting criminal cases as well as recouping the funds, is not double punishment, because irrespective whether you cooperate by agreeing to pay the scammed amount, it will still not absolve you from the long arm of the law, Shivute said, “in the financial sector the act allows us to deal with such matters administratively to recover what was taken dubiously, and also institute criminal cases against them, so there is no double jeopardy in this.”
The multimillion scam investigation is set to be wrapped up in August.