From parliament …Venaani attacks transfer pricing

DTA of Namibia president McHenry Venaani suspects that the majority of fishing and mining companies are involved in transfer pricing because of the lack of capacity in the government to control the dodgy practice.

Venaani made the remarks in the National Assembly on Wednesday during his statement on the budget, when he spoke about the issue of revenue mobilisation where company taxes remain low compared to individual tax contributions.

“I suspect, in the absence of proper data, that most of our companies are involved in transfer pricing, particularly in the mining and fishing industries,” Venaani said.

The leader of the opposition, who is also a businessman, said inputs are sourced from foreign mother companies on credit and as a result the local company will never report any profits, thereby ending up not paying taxes.

“I’m also informed that some companies have engaged in equity-debt swaps. All these point to mechanisms aimed at reducing tax payment obligations and lack of internal capacity of tax experts in the county,” he said.

Venaani has also criticised the government for its policy of handing out EPZ status to mining companies which means that companies are exempted from paying tax for a period of time.

Under the exemption, companies are allowed to repatriate their capital and profits. Diamond companies have also used this exemption to ship millions of dollars out of the country.

“We are a resource endowed country. Why should we confer an EPZ status on companies which are going to mine our finite resources, and not pay taxes?” Venaani said.

Home affairs improving

Home affairs and immigration minister Pendukeni Iivula-Ithana said the turnaround strategy which was implemented in June last year is yielding results.

Iivula-Ithana, who was moved from the Ministry of Justice in 2012 by former President Hifikepunye Pohamba, has been showered with praise for turning around one of the ministries that have been associated with little progress.

She gave the update about the turnaround strategy in parliament on Wednesday during her ministerial statement.

Iivula-Ithana said significant progress has been made in the passport and identification document sections since June 2014. Over a period of approximately three months, the backlog in both sections was completely eliminated.

The backlog in the passport section was 3 342 applications, while 45 000 applications were for identification cards.

“The backlog with the visas, study permits, work permits and permanent resident permits, has been considerably reduced and efforts are ongoing to eliminate this completely,” she said.

She also lauded the queue management system in a bid to improve customer care service and efficiency. She said the system is operating well.

The minister said the FeverTree Consulting Company helped to implement the turnaround strategy.