Namibia: NBC Can't Pay Taxes, Debt Hits N$250 Million

Investment

The State-owned Namibian Broadcasting Corporation (NBC) has been unable to pay employees' tax deductions to the Receiver of Revenue for several years and is using this money to stay afloat. In addition, it does not pay value-added tax (VAT) either and the broadcaster's total debt has grown to N$250 million (US$22.7 million).

"This is mindboggling," Johan de Waal, who chairs the Parliamentary Standing Committee on Public Accounts, said yesterday after NBC officials confessed the sad state of affairs at a public hearing. "According to the law any employer is personally liable for failing to pay Pay As You Earn (PAYE) deductions," De Waal quoted from the Finance Act.

About half (N$120 million) of the NBC's debt is for arrears with regard to VAT and PAYE payments, while other debts are for contractual obligations (N$54 million) and overdrafts and loans (N$38 million), among others.

NBC Chief Accountant Alec Kabaira also revealed that the NBC was not able to pay any of these debts. "We have understanding for your situation and the quickest and cheapest way out of this mess would be for Government to clear your debts and let the NBC start on a clean slate," De Waal said after a proposal was made by Swapo parliamentarian Nicky Nashandi.

According to NCB Director General Bob Kandetu, he found the debts existing when he started working there two years ago. "We submitted a business plan to Government but it has not yet been approved by Cabinet," Kandetu told the Committee. Kabaira said the dire financial situation of the NBC required intervention by the Finance Ministry.

The Parliamentary Standing Committee on Public Accounts will meet with top officials from the Finance Ministry next week to discuss the financial plight of the NBC.

The Namibian (Windhoek) 24 October 2008