|Tyre syndicate cheats GRN over millions in import duty|
|Written by Staff Reporter|
|Wednesday, 02 November 2011 22:39|
A Namibian registered import company is allegedly evading import duty and value added tax (VAT) by importing tyres using zero-rated codes of special tyre types that are exempted from import duty. Normal tyres for passenger cars and trucks are rated up to 25% import duties, while for instance the huge tyres for aircrafts and mining-trucks are exempted from it. The Finance Ministry is accused of abetting the scam, as it is reluctant to investigate the matter.|
“These companies are using zero-rated commodity codes to import cheap tyres and make a market value kill locally. They use their own clearing agencies. Job creation in Namibia is in jeopardy because they are stealing profits from government and that’s why there’s high unemployment,” an irate source told Informanté.
The allegations surfaced in the course of a dispute between the tyre retail industry and XYZ Investments CC, formerly known as Chika Investments CC.
Information points to unscrupulous customs officials and clearing agencies, who are purportedly deliberately not inspecting containers and colluding with the import company to use zero-rated product codes to import normal passenger and truck tyres that would otherwise bring anything between 20% and 25% import duty into state coffers. Informanté could not establish the validity of suspicions that customs officials at the Walvis Bay harbour and clearing agencies are receiving kickbacks for such zero-rated consignments.
XYZ owner Joshua Zhang, a Namibian citizen of Chinese origin, denied allegations that his company is evading import duties and VAT; “Honestly, I don’t know how customs officials and clearing agencies use the zero-rated codes on some of the tyre consignments we have imported. You have to ask customs how that happened. I declare all my sales and pay import duty, VAT, Namport and clearing agent costs.”
Zhang instead pointed fingers at the tyre retail industry and accused them of not paying tax on wheel balancing and alignment. “They ask me to import cheap tyres, now they say I make more money. Why do they buy tyres from me? They do because they also benefit. They are just jealous;” Zhang said.
Documents in Informanté’s possession show a tax invoice indicating that a tyre retailer paid about N$700,000 for a consignment of tyres but the customs’ import document indicates that the consignment under a zero-rated code was valued only at N$60,000 and only around N$5,000 import duty was paid.
A reliable source in Walvis Bay, who is privy to import matters, told the newspaper that “there have been rumours going around about import and export companies paying customs officials bribes not to inspect their containers with clearing agents collaborating in this corruption.”
Zhang said the tyre retailers who claim that his company imports tyres under false pretence, were initially his partners; “They are bitter because I’m supplying tyres to whoever wants to buy. They want me only to supply to them. They have even threatened me because they don’t want me to sell to others.”
Zhang confirmed that his company has been investigated by the Anti Corruption Commission (ACC) and the Ministry of Finance, but no wrong-doing was detected. Asked why the name of his company changed from Chica Investment CC to XYZ Investments CC, he said he made a mistake last year by selling a consignment without issuing a tax invoice, but the matter was apparently cleared when the Finance Ministry penalized him and ordered him not to use the company name anymore.
ACC Director Paulus Noah told Informanté that his commission is still investigating the case and awaits further information from the tyre retail industry. The office of the Director of Customs, Beven Simataa, was contacted but he was not available for comment.