Peter Hearne, Director at AZTech
Namibian government is likely to clamp down hard on non-compliant taxpayers over the next few years as it strives to reduce the debt to GDP ratio following a difficult period for the country’s economy. That means Namibian businesses must ensure that their systems and processes are fully compliant with the laws and regulations around collection of PAYE and VAT.
Namibian businesses can expect closer scrutiny of whether they’re complying with their tax obligations, as government aims for fiscal consolidation even as expenditure rises.
With Namibian sovereign debt last year downgraded to sub-investment grade by Fitch and Moody’s, government is under pressure. In addition to the need for government to raise more revenue, plans to establish a semi-autonomous Namibian Revenue Agency mean that we can expect tax collection to become ever more efficient in the years to come.
More robust enforcement
Without improving tax collection, Namibia will not be able to effectively finance the building of infrastructure, the provision of public services or the move to fiscal consolidation. We are likely to see the Namibian Revenue Agency emerge as an operationally efficient authority with a robust approach to registering tax payers and enforcing compliance.
This means that businesses must ensure that they declare the correct earnings for all employees and that they include the right taxes and statutory deductions in payroll calculations. It has become increasingly important to ensure that VAT and payroll returns are filed and submitted promptly and accurately to the tax authority.
There is a strong drive to ensure that businesses comply. Deliberate evasion, late payment of payroll taxes, and underpayment as a result of a miscalculation could cost your business greatly in penalties, fine and interest.
High risk, high complexity
Because compliance is complex and the risks of non-compliance are high, Namibian businesses can no longer rely on spreadsheets and other manual methods to do their calculations and file returns. Automated solutions are becoming essential for keeping reliable records and performing accurate tax calculations.
Payroll automation and accounting software - with solutions available for businesses from start-ups to mid-sized companies and larger enterprises - takes care of calculating the complex formulas for the various deductions, generating compliance reports, and keeping accurate records. That makes it easier to perform accurate calculations, file submissions on time and generate reports and electronic payslips.
Automation makes it easier to keep track of changes to tax regulations that impact tax calculations. Leading accounting and payroll providers like Sage ensure that their software is constantly updated to align with the latest local tax laws and tables for Namibia. That means one does not need to update spreadsheet formulas or learn to make new manual calculations when regulatory changes are introduced.
A good payroll and accounting solution can save those dozens of hours a year. Plus, Small & Medium Business owners can rest easy knowing that automation reduces the possibility of human error. The right software takes the pain out of compliance, allowing business owners to focus on business strategy, customers, and employee engagement rather than on red-tape.