Namibia has launched the Trade Verification System (TVS), a digital platform designed to significantly reduce the N$33 billion potential loss in tax revenue due to fraudulent activities, as estimated by the Financial Intelligence Centre (FIC).
The implementation of the system is expected to eradicate the risks outlined in the FIC National Money Laundering, Terrorist, and Proliferation Financing (ML/TF/PF) Risk Assessment Report of 2021.
Ministry of Finance and Public Enterprises Deputy Executive Director for Economic Policy Oscar Capelao said the State has substantial advantages in this initiative as it is a critical step in fortifying economic policies.
“Namibia will see to it that there is a significant reduction in fraudulent VAT refund claims while empowering the Namibian government to uphold fair trade practices and financial transparency,” he said.
He added that the system will also aid in curbing illicit financial activities and misreporting and ensure accurate and efficient tax collection.
Capelao pledged the government’s support in denouncing activities that enable illicit financial flows, as they adversely impact sustainable development.
“Over the years, there has been noted misconduct among importers who breach the country’s laws and regulations. We cannot accept this as normal, and TVS is a tool that we will use as a country to the best of our ability to ensure that there is improved decision-making due to timely data and real-time reporting,” he said.
He further added that the overall goal is to have a tax compliance ratio up as it relates to imports and exports.
The system, a collaborative effort between the Bank of Namibia and the Namibia Revenue Agency (NamRA), was launched Wednesday as an innovative step to drive the country’s trade landscape into a new era of efficiency, compliance, and growth.
The Bank of Namibia Deputy Governor, Leonie Dunn said the TVS benefits are endless for all participants in the import and export business.
She highlighted that TVS is a clear show of where innovation meets opportunity and where businesses thrive in a connected world.
“Once fully integrated, the TVS is expected to promote seamless and paperless trading processes as commercial banks, clearing agents, the Namibia Revenue Agency and the Bank of Namibia will all view the same documentation as it relates to a particular export or import, be it at payment or clearing at the border,” she explained.
She mentioned that from 2014 to 2017, there was an extensive focus on dialogue, planning, and strategic initiatives.
Dunn noted that the goal was to comprehensively address and eliminate the identified vulnerabilities and discrepancies to align with Namibia’s AML/CFT/CPF Laws, Customs and Excise Laws, Tax Laws (relating to the flow of goods), as well as exchange control laws and regulations (related to the flow of funds).
NamRA Commissioner Sam Shivute said the collaborative effort underscores the authority’s dedication to promoting transparency and compliance in trade operations.
“The Trade Verification System aligns with our mission to create a conducive environment for economic growth through efficient revenue collection,” he said.
He further commended the United Nations Children’s Fund on its contribution towards funding the project and enabling Namibia to execute its domestic sustainable goals.
