The Namibia Revenue Agency (NamRA) says 104 multinational corporations operating in the country have collectively declared questionable losses totalling N$67 billion as of March 2024.
NamRA Commissioner Sam Shivute highlighted the national tax collector’s plans to crack down on these ongoing losses through strengthened transfer pricing audits, aimed at addressing potential profit-shifting and tax evasion practices within these companies.
“One key takeaway is that, of the approximately 404 multinationals operating in Namibia, around 300 are in a tax-paying position, while 104 have consistently declared losses. By 31 March 2024, these 104 companies had reported cumulative assessed losses totalling about N$67 billion,” he told The Brief.
This comes as NamRA recently held a Transfer Pricing Awareness workshop last month which Shivute said highlights NamRA’s commitment to ramping up enforcement and ensuring fair tax contributions from companies conducting business in the country.
“Additionally, we have noted the need to begin conducting transfer pricing audits, as some multinationals and businesses are abusing transfer pricing practices. A key takeaway from this is that companies must ensure their compliance by putting their houses in order,” he said.
He noted that transfer pricing abuses and illicit financial flows have further exacerbated revenue losses for Namibia.
“Namibia has been losing significant resources due to profit-shifting and illicit financial flows, our mandate is to strengthen domestic resource mobilisation, ensuring those who operate here pay their fair share of taxes,” he remarked.
According to Shivute, these multinationals span several sectors, including mining, fishing and retail. He said companies in these industries have shown varying levels of compliance, with some using profit-shifting mechanisms to avoid taxable profits.
He urged all companies to prioritise compliance by accurately filing taxes on time, adhering to fair payment requirements, and declaring all relevant financial details.
“Legitimate losses are understandable, but we will scrutinise repeated loss declarations to ensure they reflect the true financial state of the business,” Shivute added.
Shivute emphasised that NamRA’s upcoming audits and enhanced scrutiny on transfer pricing aim to recover lost revenue and foster a culture of transparency and accountability.
“We are not only focusing on enforcement but also educating stakeholders to ensure compliance and fair contributions to Namibia’s economy,” he said.
