NamRa’s Shivute outlines transfer pricing strategy
Complex audits to be tackled
The Namibia Revenue Agency is strengthening its fight to effectively deal with transfer pricing.
The Namibia Revenue Agency (NamRa) says the establishment of a transfer pricing unit has enabled it to handle complex audits and should position it well to crack down on tax crimes.Speaking on the matter recently, NamRa tax commissioner Sam Shivute stated that the agency is receiving support in its efforts to combat financial crimes.
This follows a recent revelation by Shivute that, of the 400 multinationals operating in Namibia, only 300 are in tax-paying positions, and 104 have been declaring losses since their inception.
“With the establishment of NamRa, we have set up a transfer pricing unit. We were also fortunate to attract an expert from the private sector to lead the team as a transfer pricing specialist. We are also collaborating with various development partners, such as the International Monetary Fund, to enhance the team’s capacity,” Shivute said, discussing efforts to strengthen the agency’s ability to tackle financial crimes.
Early efforts yield results
Shivute acknowledged that the team responsible for handling transfer pricing may not yet be at the desired level, but he noted that early efforts have started to yield positive results.
“We may not be where we want to be, but the good news is that this team has begun conducting transfer pricing audits, and some of those subjected to these audits have already started paying millions. This is a positive development for Namibia,” he said.
Further supporting the agency's efforts, the African Development Bank (AfDB) has committed to providing funding for the recruitment of tax experts to address transfer pricing issues.
“The AfDB has committed funds to help us recruit experts who will assist with conducting specialist audits in two sectors, which we have already identified. We will also be working with Tax Inspectors Without Borders to support our auditors, close loopholes, and conduct complex and high-level audits,” Shivute added.
In October, Shivute stated that the agency’s compliance and enforcement strategy had helped it secure millions in tax revenue.
“We have developed a compliance and enforcement strategy, and there are some sectors that have not been contributing. Some businesses have been declaring losses year after year; thanks to the strategy, they are now paying amounts in the range of N$100 million to N$200 million. So, we are not concerned. We are pleased that there has been some tax relief,” Shivute said in October.