Windhoek – Namibia has neither been labelled a tax haven nor blacklisted, the European Union Ambassador to Namibia has said, shifting the blame on the international media for “mistakenly” reporting as such.
Namibia was categorised as a non-cooperative tax jurisdiction, she said, adding that the list is temporary, and is based on the fact that Namibia did not respond to the questions the EU posed and will be revised at least annually.
However, finance minister Calle Schlettwein, in an interview with New Era last night, was not mollified by the EU’s latest statement, saying “it is semantics” and that the EU seems not to appreciate how sensitive and serious the issue is and the damaging implication on Namibia.
The Head of the EU Delegation to Namibia, Jana Hybaskova, issued a statement late yesterday saying the decision by the EU Council to issue EU’s first-ever list of “non-cooperative” tax jurisdictions should not be read as a decision listing Namibia as a tax haven.
“Namibia was not labelled as the tax haven, as mistakenly mentioned in international press and media. Currently, there are no direct sanctions applied against Namibia,” stated Hybaskova.
A tax haven in a country with little or no taxation that offers foreign individuals or corporations residency so that they can avoid tax at home.
Schlettwein told New Era last night that the explanation being given is not satisfactory.
“With all due respect to the Ambassador, I think it is a play with words. We looked at international press [all respectable journals and media] and everyone understands it as a blacklist of tax havens.
“If they understand it otherwise then they must explain it to the international press.
If Namibia is not a tax haven then they should take us off the list. Full stop. To come now and play semantics doesn’t take away the hard fact that investors, international partners and everyone now perceive us as a tax haven.
And it does damage to our reputation,” said Schlettwein.
“There must be an understanding that this is a sensitive and serious issue and [should] be treated as such,” said the finance minister.
The EU Ambassador said Namibia is a sovereign State and, therefore, the EU Delegation “can only confirm an invitation to the government to enter the dialogue to be de-listed from the list of countries with non-cooperating jurisdiction”.
“Namibia has, according to the EU Council Conclusions, as has any other state, until December 2018 and June 2019, respectively, to comply with the suggested rules,” said Hybaskova.
“The EU Delegation to Namibia will extend its development assistance through Technical Cooperation Facility to assist Namibia to comply with the specialist and complex technical process concerning the de-listing,” the Ambassador said.
The Ambassador said the EU had asked, without receiving any response, that Namibia clarify, amend or abolish harmful preferential tax regimes in named Export Processing Zones and exporters regimes. EU also requested Namibia to join the Inclusive Framework on Base Erosion and Profit Shifting (BEPS) or to implement OECD BEPS minimum standards. Further, the EU encouraged Namibia to join both the Global Forum on Transparency and Exchange of Information for Tax purposes and to sign, ratify and participate in the OECD Multilateral Convention on Mutual Administrative Assistance on tax matters.
Schlettwein contends that Namibia did not miss the deadline on purpose but it was because of the EU’s own miscommunication regarding the deadline, and the EU must own up to that fact.
He was particularly unhappy that Namibia is being demonised after going to the EU to ask for help to stop the illicit outflow of funds from the country, something that has been reported in international media such as the Paradise Papers. “And now we are being called a tax haven,” said Schlettwein.
Meantime, the EU Ambassador says the EU encourages the Government of Namibia to engage positively with the EU Delegation, member states and the General Secretariat of the EU Council to address the tax good governance deficiencies identified by the EU.
“The Government of Namibia is invited to dialogue with the EU and its member states on issues of tax transparency, fair tax competition and Base Erosion and Profit Shifting,” she said.