Tax refunds will not affect businesses negatively, says Shiimi

Finance and public enterprises minister Iipumbu Shiimi says the payment of tax refunds by employers will not negatively affect the cash flow of businesses.

Speaking in the National Assembly on Tuesday, Shiimi said the tax refunds should not have any negative effect on employers because it comes from what was due to be paid to the Namibia Revenue Agency (Namra).

Shiimi’s comments come after some business representatives, such as the Black Business Leadership Network of Namibia, on Monday expressed fears that businesses may be forced to close shop after the decision that employers, and not the government, will have to pay employees’ pay as you earn (PAYE) tax refunds.

“I would like to dispel the misconception that the directive for employers to refund PAYE could force businesses to close down. The ministry is requesting employers to deduct the PAYE reimbursements from the employee’s tax to be paid to Namra. As such, on a net basis, there are no cash flow implications for employers,” said Shiimi.

He added that if employers cannot pay the full refund in one go, they have until February next year to do so.

“We take note that there could be instances where employers do not have sufficient tax payable liabilities to effect the full PAYE reimbursements to all employees in a single month. As such, we did not prescribe a time period within which employers should process the refunds,” said Shiimi.