The Namibia Revenue Agency (NamRA) has uncovered a tax refund scam involving N$15 million paid out to 122 taxpayers.
The agency has initiated what could be its first major fraud investigation and has announced that significant progress and discoveries have been made.
It announced that no refund claims will be processed for provisional taxpayers until 30 June 2022.
The moratorium will however not affect tax refund claims of other tax types such as individual taxpayers and value added tax claims.
NamRA commissioner, Sam Shivute says that they have already opened criminal cases against identified suspects, while the administrative violations will also be pursued in line with the applicable statutes.
The suspects are allegedly from three companies whose identities he did not disclose as the investigations are still ongoing.
”The observed trend is that several individual taxpayers profiles are
changed (mostly with the assistance of taxpayer representatives and/or bookkeepers) to
provisional taxpayers’ status, which is associated with taxpayers earning income from sources additional to their employment, such as farming,” Shivute said in the statement.
The revised returns would then be submitted with inflated expenses, which result in tax refunds becoming due to the affected taxpayer.
The preliminary indications are that several role-players are involved and although possibly premature, they cannot rule out the active participation of their staff in the scam.
Shivute encouraged ”those who might have unwittingly benefited from this scam to engage our offices across the country, to aid the investigation in exposing the true masterminds of this scam.”
Any person who receives income or to whom income accrues other than remuneration, is a
provisional taxpayer. Most salary earners are therefore not provisional taxpayers, if they have no other sources of income.
When someone is a provisional taxpayer they are employers and part take in activities that generate income and so these people submit fraudulent invoices and documents in an attempt to pay less tax or obtain undue refunds on Income Tax and VAT.