Namibia: Tax Crimes On the Increase

RECENTLY released Financial Intelligence Centre (FIC) reports for the second and third quarters of 2020 indicated that more economic agents are committing tax-related offences.

This provides the recently launched Namibia Revenue Agency (Namra) with quite a workload.

Overall, a total of 173 potential offences were detected in the country's financial system during the two quarters under review.

"Potential tax-related offences featured as the leading potential predicate offence, followed by the contravention of the Bank Institutions Act and illegal deposit-taking, with 60 and eight potential cases respectively," the reports read.

As a result of more potential tax-related offences being detected, the FIC has inundated the Ministry of Finance with spontaneous disclosures that detail their findings for the ministry to follow up on.

The finance ministry is the biggest beneficiary of the 144 intelligence disclosures prepared.

In the last six months of 2020 the ministry was tipped off by the FIC through the dissemination of 60 intelligence disclosures.

Sam Shivute, Namra's commissioner, has promised to dedicate special attention to profit shifting and transfer pricing to avoid further base erosion.

He undertook that this would receive special attention, as it has not before.

All eyes will now be on the commissioner's utilisation of this information.

Second in line is the Anti-Corruption Commission and the Office of the Prosecutor General, which received 22 intelligence tip-offs from the FIC in the last six months of 2020.

They are followed by the Namibian Police, which received 21 tip-offs.

Apart from tax-related offences, the FIC has also detected corrupt activities, potential fraud, and the violation of exchange-control regulations.

The centre highlighted it would increase existing efforts to make the authorities aware of the value addition of its output to cases under investigation.

This would be done "by informing them (domestic and internationally) of criminal activities which would otherwise have gone unnoticed", the centre says.

The tip-offs provided to law-enforcement agencies emanate from the country's financial system as compiled by various transaction facilitators in the economy, led by commercial banks.

In the six months, various reporting institutions led by commercial banks have compiled 962 suspicious transaction reports to the FIC, highlighting various red flags.

Out of this number, the FIC managed to open case files for 124 transaction reports.

The centre escalated these reports to actionable intelligence, which were then forwarded to the relevant law-enforcement agencies and authorities for further investigation.

Some of the reports are still under review to determine the appropriate action to take.

Moreover, during the six months under review, 75 suspicious action reports were issued by various institutions, of which 15 were escalated for further analysis.

The FIC has also interjected in certain transactions with eight intervention orders.

During the third quarter one intervention order was issued, involving an amount of N$138 888.

In the second quarter of 2020 more than five interventions were issued which were worth more than N$3 million.

The highest amount restricted in terms of the Financial Intelligence Act over the three quarters was N$14,9 million, which was recorded at the end of 2019.

As of 31 December 2020, the FIC had a total of 1 704 active entities registered as accountable reporting institutions.

The centre conducted a supervisory vulnerability assessment outcome, which highlighted that the authorised dealers with limited authority, banks, customs-clearing and forwarding agencies, and legal practitioners are among the high-risk sectors for potential money laundering.

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