06 Dec 2017 16:30pm
WINDHOEK, 06 DEC (NAMPA) Minister of Finance, Calle Schlettwein on Wednesday strongly rejected the assessment by the European Union (EU), that led to Namibia being blacklisted as a tax haven.
Schlettwein was speaking at a media conference in response to the EU, which placed Namibia on a list of non-cooperative jurisdictions for tax purposes on Tuesday.
He explained that officials from the Inland Revenue Department recently met with officials from the EU Embassy to Namibia to discuss this matter and to seek clarification on criteria.
Since not all explanations could be provided, it was agreed that further engagement with local EU staff and or EU tax experts from abroad was needed, he said.
After further engagement with the local EU staff, we were advised of the deadline to inform EU of our commitment to implementing proposed actions or how we react to them, Schlettwein continued.
He stressed that due to miscommunication, Namibia missed that deadline, but that does not make Namibia a non-compliant country or tax haven.
He noted that there were two deadlines of 05 and 12 December 2017.
We were all under the impression that the engagements were ongoing, the finance minister said.
He stressed that the EU listed four agreements that they unilaterally created and expected Namibia, a sovereign country, to sign and the fact that the country has not signed up is one set of criterion used to conclude that Namibia is a tax haven.
What they did not consider, according to Schlettwein, is that Namibias tax system addresses the concerns in these agreements that the EU wants Namibia to join.
He indicated that the second issue raised was Namibias perceived tax incentive scheme to incentivise manufacturing and to improve production capacity as a potentially harmful tax practice.
The EU, in its communication, insisted that Namibia should dissolve and abandon its incentive schemes to incentivise manufacturing and to improve production capacity, which the country has severe difficulty with.
We believe that as a developing country, we must use every little bit of policy space that we have to improve our productive capacity and it is unfair to now insist that we should not develop our productive capacity by incentivising it.
Schlettwein however noted that Namibia is worried that there are negative outcomes to follow from the blacklisting and have arranged a meeting with the EU Ambassador to Namibia to further deliberate on the matter.