Namibia has lost an excess of N$4 billion over a three-year period due to undeclared trade transactions, latest data reveals.
According to the Bank of Namibia (BoN) and the Namibia Revenue Agency (NamRA), the losses are due to the labour-intensive manual handling of trade paperwork.
This was revealed as the two regulators launched the trade verification system, which aims to ensure compliance with tax regulations as well as deter tax evasion, trade-based money laundering, fraud and capital flight, it also streamlines trade operations.
“An investigation done through the establishment of a public-private partnership under the Financial Intelligence Centre (FIC) found that the system was also susceptible to errors, fraud and non-compliance by parties, hence, the need for the establishment of a framework that would minimise the risks the country faced,” the regulators said in a joint statement.
“The primary vulnerability in the national assurance frameworks arises from the absence of mechanisms that compare or reconcile trade declarations made via customs, with financial transactions related to such trade.”
The statement further reads: “This system automates trade, reduces the reliance on manual processes, advances and ensures the authenticity of documents, and provides a single source of truth on which both customs and the financial services can rely to enable capital exportation as payment for foreign goods and services and reduce operational costs while ensuring regulatory compliance.”
According to the statement released by BoN and NamRA, the system will be integrated with NamRA’s Automated System for Customs Data (ASYCUDA) and will allow the user to declare transactions in multiple currencies as well as the ability to manage documents and update relevant export and import data.
“Traders now have the opportunity to create their own Unique Consignment Numbers (UCR) for declarations at NamRA and commercial banks, particularly for prepaid export transactions,” the statement read.
Furthermore, the system also ensures that the BoN and commercial banks are able to ensure oversight, accountability and financial accuracy through the issuance of the unique identity number.
“The system further eases commercial banks operations as they will now be able to include new data elements designed for automation and effective management of transactions,” the statement reads
Namibia is amongst the first African countries to adopt a Trade Verification System and will be launched on 17 November 2023.
