12 EDITORIAL NEWS Friday, December 8 2017| | NEW ERA 208 0318 MoHSS impasse needs urgent solution It has become common in Namibia to see senior public figures slugging it out in public, the latest being the public feud between and his permanent secretary, Andreas Mwoombola. Last year, around this time, a public spat between lands minister Utoni Nujoma and his then deputy Clinton Swartbooi. their ministry’s corridors as it blew up in parliament chambers where TV cameras. Also last year, ministers Bernard Esau and Pohamba Shifeta differed sharply – and publicly – on the issue of marine phosphate extraction. The message that emanates from these feuds, at least at the face of it, amid such sharp differences. agency promoting gay marriage, birth. This sends out an incoherent message about what exactly that whether it is pushing to increase or decrease its population. In the case of the ministry of health, the allegations that came to the fore are pretty serious. It is not our so far are pretty self-explanatory. As if the alleged irregularities were not enough, matters are exacerbated by the feud between the minister and the permanent secretary – the ministry’s two most Our public health sector is already medical supplies, problems befalling that ministry are baying for a crisis contrast to Harambee, President Hage Geingob’s signature rallying call, which essentially means pulling together in the same direction. are pulling in opposite directions and the ministry is caught in between, shifting one of them elsewhere. Being begging for a new permanent may not excel in another portfolio other than health. It is, therefore, urgent that impasse – and this does not mean action here is to pull the two men redeploying one of them elsewhere, if not both of them. progress on many fronts in health and the escalation of current tensions the gains made. It is unimaginable, for instance, that a patient who cannot undergo an operation due between people who are supposed to come to his or her rescue. Born-free in exile My country is not at war, or at least not the for economic emancipation. Adopting the reconciliation policy after for political freedom. was compromised from our part. In desperate a sustained uprising and non-stop mobilisation. power than that of the economy. mobilisation and insurgency by the proletariat has many times resulted in compromise by the existed racially, what happens now when the regime and economic elites are the same race as the economically oppressed masses? produced? The landless remain landless, the more sadly, the educated are still unemployed. We can no longer blame the apartheid regime; it has been almost three decades in a democratic conditions we are in are no longer those our own Too many times money has gone missing and too comfortable with apologies and no action, and somewhat condoning corruption. our mutual dreams. education and persistently sees to it that it is more economically practical to produce entrepreneurs onto economic power. When we successfully carry out our reconstruct laws, which protect the inability to redistribute wealth, as it should. After we grow intolerant of inequality when those who put us in nation be economically emancipated! It is admirable to witness reformation in local politics. Our liberators are slowly and peacefully and I boast with pride to say I am a patriotic citizen of a nation, which not only preaches democracy, but who practices it. Soon, we shall return from and gear it towards economic prosperity, until Taloshili Olavi Hangula University of Rochester, New York, USA Introduce road safety as a school subject Namibia, a country of a population of number of road accidents in the world, The big question is: what’s causing these accidents and what should we causes could be named as our roads – are they too narrow? Are they too old? Maybe yes, maybe no. Is alcohol But the biggest cause could be I learned that the most wastage of the national budget is on the salaries of the personal assistants, many of whom do not understand the essence of their powerful weapon to the politicians to whom they are appointed to aid, in that they can completely destroy the character of the politician. This happens because many do not citizen of the country. The worst they neglect and ignore the issues raised by the public by judging their pointed to be the attitude of our disobedient, careless and impatient to deal with. It’s not easy to change someone’s attitude. Safety as a subject in schools? Just educated on road safety. Sharlu Shilongo Teacher, Ministry of Education Some PA to politicians are good for nothing is meant for all. Therefore a good political leader is one who listens to the people and brings meaningful economic set-up of the country. I learned that PAs are jeopardising they render assistance to, and this It therefore goes without saying that administration into the spectrum of Henry Ngenomesho
thought leaders Women-centric policy and boardroom diversity needed Page 14 EU got it wrong on tax haven accusations This week the European Union (EU) released a list of noncooperative jurisdictions for tax purposes, which includes Namibia. The Namibian government emphatically rejects this assessment and would point out the following attributes of what we consider to be an equitable and transparent tax regime. from the EU Embassy to Namibia to discuss this matter and to seek all explanations could be provided to all our questions, it was agreed that further engagement with local EU staff and or EU tax experts from abroad is needed. After further engagement with the local EU staff, we were advised of the deadline to inform EU of our commitment to implementing proposed actions or how we react to them. Due to miscommunication, we missed that deadline, but that does not make Namibia a noncompliant country or tax haven. We are, therefore, perplexed to learn that the EU has revealed names of non-cooperative jurisdictions for tax purposes, including on 5 December 2017, which include Namibia. Namibia has a small open economy with a tax system based on the principles of equality and fairness and we expect all taxpayers, whether, individual or corporate, to comply with the relevant tax legislation. The Namibian taxation system is Tax Act (which regulates personal and corporate tax) and the Value Added Tax Act. The Namibian tax system is, therefore, not based on individual residency but where the income arises. Non-residents temporarily employed in Namibia, or a foreign company trading within Namibia, will be liable for taxes on income earned within Namibia. Namibia has a source-based tax system. Residents and nonresidents earning Namibian-sourced income are subject to income tax. and 37 percent. Non-manufacturing and manufacturing companies pay respectively. Mining companies, excluding those mining diamonds, pay tax at 37.5 percent. The tax rate for diamond mining is 55 percent. Companies registered as Export Processing Zone entities pay between 0 percent and 32 percent (dependent on the export destination) and payroll tax. Payroll tax on employment income must be withheld by the employer under the pay-as-you-earn system and remitted monthly to the Receiver of Revenue. Transfer duty is payable on the transfer of immovable property. documents. The Namibian tax legal framework contains anti-avoidance rules on transfer pricing and thin capitalisation. Transfer pricing rules will apply when transactions between related parties are found not to have been done on an arms-length basis. Thin capitalisation rules will apply where interest is paid on foreign loans. Currently, the 3:1 debt-to-equity ratio is used for tax purposes, which is also the ratio prescribed by the Bank of Namibia. The tax laws allow the tax authority to reassess a tax-payer’s liability when a transaction or scheme has been found not to ‘at arm’s-length’, or is designed to avoid or evade a tax liability. This legislation should address any concern that may exist. Withholding tax applies where interest is paid to a foreign company or fees for services are paid to a foreign individual or business. Tax Failure to do so, will incur penalties and interest in addition to the tax. The standard Value Added Tax (VAT) rate in Namibia is 15 percent. Certain goods and services are zerorated, such as direct export of goods and international transport and some basic food items. VAT is charged on the supply and import of most goods and services. Businesses must register for VAT if their turnover is more than N0 000 per year. Under the Customs and Excise Act, customs and excise duties and the fuel levy are payable. Namibia is a member of the are applied on imports from outside are levied on traditional excisable products including fuel, jewellery, tobacco and liquor. The Customs and Excise Department in the Ministry of Finance controls the imports, exports and manufacture of certain goods. These laws and rules should be adhered to. Detection and interdiction of illicit activities, including crossborder movement of undeclared as well as under-declared goods are done by the Customs and Excise Department in the Ministry of Finance. Mining royalties are levied in compliance with the Prospecting and Mining Act, as a percentage of the value of the minerals. Rates vary between 2 percent and 10 percent. to be paid by employers. Employers must also make employee contributions for employees whose can be contacted for further details. are monitored by the Bank of Namibia. Before cash is introduced or leaves Namibia, the Bank of Namibia approves the application to move funds. The regulation, therefore, is made aware of the purpose of the movement is legitimate. Namibia has 11 double taxation agreements, including several European countries, namely Germany, the United Kingdom, France and Romania. Other EU member states have approached Namibia to conclude such tax cooperation arrangements, including While the Namibian economy continues to grow, the challenges confronting us are significant. Government’s focus is on sustainable economic growth ensuring that Namibia’s economy will create jobs to sustain a higher quality of life, helping businesses succeed in the global economy by enhancing conditions for creating and growing businesses, built natural resources in a safe, responsible and secure way and create high value addition and improved value sharing. The importance of taxation in economic development cannot be overemphasized. Our country face challenges of unemployment, poverty and income inequality. Government to ensure that these challenges are addressed through the budgetary allocation to economic and social sectors including education, infrastructure development and health. We can, therefore, not transparent collection of tax revenue by creating tax havens. 1. Bermuda 3. The Netherlands 7. Luxembourg 9. Hong Kong 10. Cyprus 11. Bahamas 12. Jersey 13. Barbados 14. Mauritius “Corporate tax havens are helping big business cheat countries out of billions of dollars every year,” said Esmé Berkhout, a tax policy adviser for Oxfam. “They are propping up a dangerously unequal economic system that is leaving millions of people with few opportunities for a better life.” None of the above tax havens have been included on the EU list and, therefore, one can only speculate on the rationale applied in compiling the EU list of tax havens. We agree with Alex Cobham, chief executive of the Tax Justice Network, who stated: “Rather than have a list of tax havens based on an objective set of criteria, as originally envisaged, the members picking their least favourite countries to name and shame. The a politically led list that includes only the economically weak.” Namibia is clearly, by any objective recently published “Paradise Papers”. We had hoped that our trusted partners, including the EU, would curbing tax evasion and, as we speak, we have EU experts within the Ministry of Finance assisting us to improve our tax system. Namibia and EU member states are closely linked through the EPA (Economic Partnership Agreement) Free Trade Arrangement, which includes disclosure provisions on taxes. Namibia has welcomed European investors and has allowed access to our natural resources (minerals and with all EU member states through well-established cultural links. We conclude that this unilateral action against Namibia by the EUis unjust, prejudiced, partisan, discriminatory and biased. We believe that we have not been treated equitably and call upon the EU to correct what already has caused serious harm to Namibia’s outstanding reputation as a politically stable democracy with rule of law based institutions. Namibia commits to use its best endeavour to clarify outstanding questions and answers to correct this unfortunate missconception. Unfair actions such as this against small and vulnerable economies harm our people, diminish our chances to prosper and perpetuate inequality. This action by the EU authorities is against the very spirit of our cultures and cooperation efforts. This is an abridged version of Finance Minister Calle Schlettwein’s press conference held this week to respond to allegations that Namibia is a tax heaven.