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Namra sued over N$33 million deduction

Chinese-owned Zhong Mei Engineering has taken the Namibia Revenue Agency (Namra) to the High Court seeking an order to set aside a decision that will see them pay N$33 million in outstanding taxes.

The company, represented by lawyer Sisa Namandje, wants its case to be heard on an urgent basis.

This comes after Namra earlier revealed that the company has declared no tax payments to the agency despite benefiting from the public procurement system to the tune of almost N$1 billion.

As a result, Namra deducted over N$33 million from Zhong Mei Engineering’s account.

In their application, Zhong Mei Engineering names Namra as first respondent, the commissioner of the revenue agency, Sam Shivute, as second respondent, Standard Bank Namibia as third respondent, the Bank of Namibia as fourth respondent, the minister of finance and public enterprises as fifth respondent, the attorney general as the sixth respondent and the Intelligence Strategic Enforcement Unit at Namra as seventh respondent.

According to court documents, Zhong Mei Engineering says it wants the court to stop Namra from enforcing its decision that the company must pay the outstanding tax amount.

“The applicant [Zhong Mei Engineering] submits in its main submission that it is fatal that Namra’s Intelligence Strategic Enforcement Unit, which, without power and legal competence, issued a notice to declare Standard Bank as an agent of the applicant, and to direct that the applicant’s money be paid to Namra . . . made a fatal choice and election by not going on an affidavit to justify his decision. He filed a mere and unhelpful confirmatory affidavit.

“This is a self-destructive choice and he must live with the consequences,” the company states.

Zhong Mei Engineering is also seeking an order declaring Namra’s decision to have its money transferred from the company’s account at Standard Bank unlawful.

It also wants the over N$33 million paid back to the company, and an order declaring Section 91 of the Income Tax Act of 1981 unconstitutional.

“Pending the return date, the applicant [Zhong Mei Engineering] seeks on an urgent basis on 27 July 2023 the following orders: an order directing the first, second, fourth, fifth and seventh respondents cause to be returned to the applicant’s bank account, with the third respondents the amount of N$33 031 543 transferred by third respondent on the instruction of the seventh respondent within two days of the court order,” the Chinese-owned company says.

Namra spokesperson Steven Ndorokaze yesterday referred The Namibian to court documents, saying he cannot comment as the matter is sub judice.

In the documents, Shivute says the N$33 million collected from the applicant’s account was done in accordance with Section 91 of the Income Tax Act and is therefore lawful.

He says equity is one of the desirable characteristics of a healthy or good tax system.

“This requires that those in equal circumstances should pay an equal amount of tax,” Shivute says.

According to the documents, he says there is currently huge challenges to the Namibian tax system.

He says there is a huge disparity between individual taxpayers and corporate tax payers who have been negligent of their duties to pay taxes over the years.