Tax refund scam escalates to N$104m
A N$15.2 million tax refund scam, uncovered by the Namibia Revenue Agency and revealed at the end of March this year, has now increased to N$104 million.
The tax authority has stated the illegal payment of refunds of millions of dollars is being perpetrated by a criminal syndicate.
Responding to questions from this publication, spokesperson at NamRA Yarukeekuro Ndorokaze stated the astronomical figure is expected to increase even further, as investigations are still ongoing.
About 800 taxpayers from close to 40 institutions have so far been identified as recipients of fraudulently claimed income tax refunds from the public and private sectors. “So far, N$2.45 million has been recovered in this regard, through payments made by walk-in taxpayers, third-party payments and payment arrangements with taxpayers as of August 2022. Efforts for enhanced recovery continue,” said Ndorokaze.
He further confirmed that some NamRA staff have been linked to this scam.
However, he was unable to disclose the number and/ or identity due to an internal process already underway in this respect. As such, over 40 cases have been lodged with the police to date.
It must be noted that based on the facts, one case might involve several taxpayers; hence, there might not be a separate case opened against each suspected taxpayer, he stated. In July this year, NamRA commissioner Sam Shivute stated by 28 February 2022, 43 166 natural persons were registered as provisional taxpayers, this being a person deriving any amount as income that does not constitute remuneration. Shivute explained the modus operandi of the scam was for several individual taxpayers’ profiles to be changed, mostly with the assistance of taxpayer representatives and/or bookkeepers to provisional taxpayers’ status.
These profile changes are associated with taxpayers earning income from additional sources, such as farming, which is separate from their regular employment.
Then, subsequently, revised returns would be submitted with inflated deductions, resulting in tax refunds becoming due to the respective taxpayer.
The NamRA chief said the scam originated long before the revenue agency came into existence, and that the illegal activities came to the fore as fraudulent claims escalated in 2019, causing NamRA to commence an investigation.
The taxpayers involved fall within the N$250 000 to N$350 000 income bracket, and they are involved in different economic sectors.