THE Ministry of Finance has paid out more than half the N$3 billion in outstanding value added tax refunds, plus interest, said spokesperson Tonateni Shidhudhu.
He says in April alone, N$1,7 billion was paid out.
The announced outstanding refund balance in March was around N$3 billion. Refunds needed to be expedited as soon as possible to help cash-strapped businesses as a result of the Covid-19 lockdown.
This was part of the Covid-19 stimulus package rolled out by the government at the beginning of April.
Shidhudhu said interest on delayed refunds, if any, would be very minimal since payment was only approved in the last month or so.
Under normal circumstances, when a taxpayer's affairs are in order and treasury delays the payment of a value added tax refund, interest of 11% per year is supposed to be paid to the taxpayer.
This 11% is levied only when a refund runs on a payment cycle.
Shidhudhu says all hopes are that the backlog of refunds would be cleared by the end of July.
"This is a large amount and should demonstrate our commitment to assist businesses to address their cash flow needs in this difficult period," he said.
Taxpayers have for long pleaded for their refunds to be paid out on time to enable business growth and cash flow positives without incurring debt or running into cash flow problems.
This has for long fallen on deaf ears.
Shidhudhu says while it is true some businesses have complained about not receiving their refunds, it is important for these entities to also understand refunds are not paid out automatically, but only after verification
"It does not mean when one submits a tax return, they would automatically receive a refund. It depends on the outcome of the audit," he said.
Value added tax is one of the biggest sources of government revenue, with an estimated N$13 billion to be collected for the 2020/21 fiscal year.
This is at least 26% of the N$56 billion in expected revenue.
Shidhudhu says with the easing of the lockdown, taxpayers are encouraged to still continue paying their taxes and to adhere to their tax compliance responsibilities, while urging taxpayers to register on the Integrated Tax Administration System (Itas) for a speedy and effective process.
Email: [email protected]