Over 1 380 finance ministry officials will be required to reapply for their jobs when the proposed state-owned Namibia Revenue Agency is formed.
Finance minister Calle Schlettwein tabled the Namibia Revenue Agency Bill 2017 to pave the way for the creation of the independent agency which will assess and collect taxes.
The agency will not only extract the largest part of the finance ministry’s workforce, but a proposed law tabled last week suggests that the new parastatal should be allowed to attract experts by paying more than what other civil servants currently earn.
When he tabled the proposed bill in the National Assembly last week, Schlettwein said 730 officials from the Inland Revenue department and 650 from the directorate of customs will have to reapply for their jobs when the new agency opens next year.
According to Schlettwein, the two departments make up 79% of the total staff at the finance ministry.
Schlettwein told The Namibian yesterday that the finance ministry has a total workforce of 1 740, but the two departments have up to 1 380 workers.
“To further avoid compromising on the skills needed for the agency, there will be no automatic transfer of existing staff of the departments of Inland Revenue and Customs and Excise to the new institution,” the minister stated.
However, finance officials will be offered the first opportunity to apply and compete for jobs offered at the new agency before the platform is opened up to the public, he said.
“As such, arrangements will be made to ensure that the selection process is transparent and adheres to best practices,” Schlettwein added.
According to the minister, officials at the finance ministry who fail to get jobs at the new tax agency will be offered positions elsewhere in government, as stipulated in the Public Service Act.
He said some officials at the agency will also be highly paid in order to attract the best talent.
“The agency will be exempted from the public service rules and public enterprises remuneration guidelines,” he noted.
The 2017/18 budget documents indicate that the finance ministry will spend N$28 million on salaries and other benefits. Schlettwein said the new parastatal will start working next year at a date yet to be announced, adding that there is a need to manage the transition process well to avoid making costly mistakes.
He said for now, a finance ministry and revenue agency task team will finalise the transitional aspects for the establishment of the agency.
“This entails further consultations on the operational modalities, the determination of the recruitment process, and proposals for the draft internal policies of the new institution in preparation for the recruitment of the board and senior management of the agency,” Schlettwein stated.
The minister said one of the functions of setting up a highly-paying tax body is to catch companies and individuals who are taking advantage of loopholes to avoid paying taxes.
“We are a resource-based economy, which comes with the potential for illicit financial flows, transfer pricing, profit shifting and other base-eroding tax planning activities,” he said.
Illicit financial flows involve money illegally earned, transferred or used which crosses national borders. Culprits are usually multinational companies and criminals.
The minister said tackling illicit financial flows will require specialised skills, which could not be optimised in the public service due to a lack of skills.
Tackling illicit financial flows will give President Hage Geingob’s administration plaudits for tackling corporate and financial cheating.
The real impact of illicit financial flows on Namibia is currently not known, as the government continues to rely on international statistics when commenting on the subject.
For instance, the United States-based think tank, Global Financial Integrity, said in its 2012 report that Namibia lost around N$5,6 billion per year to illegal activities between 2001 to 2010.
The Namibia Revenue Agency will be run by a seven-member board on a three-year term. The board members will be appointed by the minister from experts selected from state entities, such as the permanent secretary from the finance ministry, the commissioner, and five members who will be appointed based on areas of expertise such as taxation, law, auditing and human resources.
A commissioner will be appointed as the chief executive for five years. The chief executive can only serve for a maximum two terms (10 years), but his/her second-term appointment should be based on “excellence” in performance, and at the discretion of the finance minister. Source: The Namibia, 2017-06-27. Author: Shinovene Immanuel