Financial Crime World

Types of Financial Crimes in Namibia Hamper Economic Growth

A Lack of Coordination and Inaction Hinders the Fight Against Financial Crimes

Namibia is plagued by various types of financial crimes, including money laundering, tax evasion, and illicit financial flows. Despite efforts to combat these crimes, a lack of coordination among government agencies and inadequate resources have hindered progress.

Red-Flagged Cases Go Unaddressed

  • The Financial Intelligence Centre (FIC) flagged 254 potential financial crimes between January 2019 and February 2020.
  • Banks and other financial institutions submitted over 1,100 suspicious transaction reports and 236 suspicious activity reports.
  • However, authorities have failed to provide updates on what has been done to address these red-flagged cases.

Lack of Coordination and Centralized Portal

  • The police admit that they do not have a centralized portal to track finalized cases, cases under investigation, or individuals and companies being prosecuted.
  • The Financial Intelligence Centre (FIC) also lacks a centralized unit to patrol illicit financial flows in the country.

Tax Evasion: A Significant Issue

  • The Inland Revenue commissioner admits that they receive actionable intelligence from the FIC but do not have enough resources to audit every case.
  • As a result, some cases of tax evasion go unaddressed, depriving the government of millions of dollars in revenue.

Experts Call for Tighter Laws and Greater Coordination

  • Vijayakumar Kandaswamy, a professor in financial mathematics at the University of Namibia, suggests creating a unit that specifically focuses on tax evasion and money laundering matters.
  • Samuel Nuugulu, a risk management lecturer at the University of Namibia, agrees that the lack of progress on FIC red-flagged cases highlights loopholes and weak structures that need to be addressed.

The Consequences of Illicit Financial Flows

  • Illicit financial flows can have severe economic consequences, including draining foreign reserves, causing high inflation, and reducing tax collections.
  • The impact is often felt by those at the bottom of the economic ladder, rather than those at the top.

Strong Institutions are Necessary

  • Experts say that strong institutions are necessary to compel individuals and companies to engage legally, deal honestly, and report and pay their taxes and dues in accordance with existing laws.
  • Until this happens, financial crimes will continue to plague Namibia’s economy.