Namibia moves to curb illicit financial flows

Namibia is working on curtailing illicit financial outflows through various mechanisms that are also aimed at enhancing tax collection. 

This was after the Namibia Revenue Agency and the Bank of Namibia jointly announced that they are working on introducing a web-based regulatory system, known as Trade Verification System , to mitigate the illegal outflow of funds from the country.

The system, which will be used as a monitoring capability to reconcile the cross-border transfer of money to the movement of goods into the country, is expected to be operational by October this year. 

"It will also serve as an Electronic Export Monitoring tool to aid in the repatriation of export proceeds and for detection of misclassification of export proceeds," said NamRA's Chief Strategic Communications and Support Engagement Steven Ndorokaze.

He added that there will be an upgrade of the ASYCUDA World System and an introduction of a field for the traders to report the trade transactions in foreign currencies.

Further, traders will be required to insert invoice numbers on the NamRA clearance SAD500 form, which will enable the TVS to match the goods declared at Customs against payment made at a commercial bank.

"For ease of trade facilitation, traders will be able to upload trade documents and storage of such on the ASYCUDA system, so that the traders would no longer need to present the same at the commercial banks for payment," clarified Ndorokaze.

The implementation of TVS, he added, will further facilitate the ease of identifying potential or perpetrators of illicit outflows by the regulators, and through this intelligence provide a basis for investigations and possible conviction. 

"It is also expected to improve the collection of taxes and levies related to import transactions, thereby reducing tax evasion and reducing import duties and taxes refund claim fraud, since the system will have data against which refund claims may be verified.

As we continue to enhance our processes and systems, we emphasise that lack of integrity among some traders negatively impacts society as a whole," he stressed. 

This comes as Namibia is making frantic efforts to fully comply with anti-money laundering (AML) and countering the financing of terrorism (CFT) regulations to avoid being greylisted, following neighbouring South Africa’s listing.

A report from the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG) found that Namibia was not in line with some global best practices when it comes to AML and CFT regulations related to the legal framework and the successful prosecution of financial crimes.

Non-compliance could result in Namibia being greylisted by the Financial Action Task Force (FATF), which could have significant consequences for the country's financial system. Reputational harm could reduce foreign direct investment, impact capital flows and increase due diligence costs.


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Last modified on Tuesday, 14 March 2023 20:22

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