By: Hertha Ekandjo

Namibia Revenue Agency (NamRA) says that the agency is not introducing a new tax style on clothing businesses, but a custom levy that is already in place.

“Instead of using the rate that would be determined by the weight of the bale, we came up with the solution of a flat rate per bale and that would be a function of what your estimate is on the value of the bale. That rate would be a function of the percentage of the value of that bale. Hence the talk about the 20 per cent that is being used,” the tax collection agency’s Chief of Strategic Communications and Support Engagements, Steven Ndorokaze said.

This comes as on Wednesday the media reported that NamRA would be expecting 20 per cent tax from second-hand clothing businesses.

“What we are trying to do is to make it worth of for the trader that is it becomes a predictable rate but it is still discussions and not something that has been approved. We are looking at making it at least less than what they are currently paying in terms of customs duty. It will also be beneficial for the state and it would discourage them from that channel that they are using,” said NamRA.

Customs duty refers to the tax imposed on goods when they are transported across international borders. In simple terms, it is the tax that is levied on the import and export of goods. The government uses this duty to raise its revenues, safeguard domestic industries, and regulate the movement of goods.

According to Ndorokaze, many second-hand clothing bales are imported from Angola and there was nothing wrong with the importation of those bales and the clothes. “But at entry points, those bales attracted customs duty and that is what we are talking about and not tax”.

He gave an example stating that “at the moment in terms of customs duty they are charging around about N$25 per kilogram, one bale could weighing around 14 to 40 kilograms. If you take that as a rate it would mean that for one to bring in a bale it will cost about N$900 to N$1000 in custom duty as an estimate”.

Moreover, NamRA says that many of the traders who bring in the bales, try to avoid this custom duty by increasing the services of the people who would smuggle the bales in via undesignated points of entry.

Ndorokaze noted that when bales get in the country, traders would then pay those who smuggled the bales in, which is a chain of supply channels. One brings it in and then someone else takes over before it reaches the trader.

“By then the amount that the trader would pay would be more than what they would have paid in customs duty and that is only for those in the northern part of the country,” he noted.

Furthermore, he said when it comes to the central and southern part of the country, there was a network that had been established, which they were now busy investigating as an entity.

He added that there were connections where people in between, such as at Oshivelo would be another fee which is to be paid imposed by those who would be applying.

“In some instances when those bales get to Windhoek before the traders themselves get them, there`s also another party that is also charging their own fee. What they would have paid from where the source up to the destination it would have been averaging around N$1500 to N$2000,” said Ndorokaze.

“When you look at the situation, you will realise that not only is the chain that they are using is illegal, but also the channel that they are using”

Meanwhile a second-hand clothing business owner of ‘Lusha’s collection’ says that she employed 10 Namibians, and if she has to start paying the alleged 20 per cent tax, she will be left with no choice but to let her workers go which would leave them unemployed.

“The 20 per cent is unacceptable, and we cannot afford it, the bales are already expensive and we pay for them at the border,” she said.

Lusha stated that she had rent to pay and a family to take care of and that paying extra tax would make it difficult for her to survive.

“We have mixed feelings because it is way too expensive and NamRA is not being fair. Some of the bales already come with old clothes which one sometimes has to sell for N$5 each, so how much do they expect us to profit from the bales?” she asked.