Namibia
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Taxpayers implicated in tax scam approach court seeking relief

A group of taxpayers from several companies have approached the High Court seeking an order from the Namibia Revenue Agency (Namra) to temporarily halt the decision to deduct huge amounts of money from their salaries.

The employees, from several public and private institutions, are among those implicated in the N$833 million tax refund scam.

Namra directed various employers in Namibia to deduct money from employees’ salaries, who unjustifiably or fraudulently received income tax refunds which they could not substantiate when requested to provide the documentation under section 64 (1) and (2) of the Income Tax Act.

The money is to be deducted over a period of 36 months.

On 12 September, the court is set to hear the matter of eight employees, led by Joseph Eben Tuzembeho and Herbert Tjongarero, who have taken legal action against Namra’s decision.

In the first part of their application, the group is also calling for a review of tax-related notices and the constitutionality of a particular section of the Income Tax Act, 1981.

According to the court application, lodged on 22 December 2022, the group is seeking an order to halt the implementation of decisions referred to as the ‘Impugned Decisions’.

Additionally, the group has asked that deductions from their salaries, which were instructed by Namra, be temporarily ceased by Nedbank, Standard bank, First National Bank, the University of Namibia, and Sanlam Namibia Holdings.

They have demanded that Namra refund all money previously deducted from their salaries.

In Part B of the application, the group has indicated their intent to challenge the legality of various notices issued by Namra.

These notices informed the applicants about their tax liability and demanded payment of alleged amounts owed in income tax.

They have called upon Namra and 11 other respondents, which include banks, the Namra board, finance minister Iipumbu Shiimi, and others, to show cause as to why these notices should not be reviewed and set aside.

The applicants have also challenged the appointment of respondents, the banks, Unam, and Sanlam, as agents for making deductions from their salaries.

They argue that such appointments should be reviewed and set aside.

The applicants are furthermore invoking articles 12, 16 and 18 of the Namibian Constitution, asserting that the notices issued by Namra are contrary to these constitutional provisions.

They are urging the court to declare section 91 of the Income Tax Act, 1981 as unconstitutional.

The applicants propose that parliament rectify this section within 12 months from the date of judgement or within a period as determined by the court, as provided by article 25(1)(a) of the Namibian Constitution.

The court will hear part A of the application on 12 September and determine a hearing date for part B of the matter.

Last week, The Namibian reported that Namra is investigating tax refund scams amounting to N$833 million. A total of 1 168 taxpayers associated with 84 different institutions are implicated in the scam. Namra has so far issued 322 demand letters.

The agency’s recovery process has yielded N$19,9 million through intensive recovery interventions.