Taxation Report: Analysis of Taxation in Khomas Region, Namibia

This report provides an analysis of taxation, specifically focusing on Value-Added Tax (VAT) within the Khomas Region of Namibia. It examines the impact of VAT on the region's economy, considering factors like infrastructure, poverty levels, and economic disparities. The report delves into the significance of taxation as a primary revenue source, highlighting the contributions of income tax and VAT. Furthermore, the report explores forensic accounting, defining its role in investigating financial matters, including fraud detection and asset recovery. It outlines the functions of forensic accountants, investigative procedures, and techniques used to analyze financial data and identify irregularities. The report references various sources to support its findings, offering a comprehensive overview of taxation and forensic accounting practices.

Running Head: TAXATION
TAXATION
Name of the Student
Name of the University
Author Note

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Table of Contents
Answer to requirement 1............................................................................................................2
Answer to the requirement 2......................................................................................................4
References..................................................................................................................................7

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Answer to requirement 1
Value-added Tax (VAT) is a type of consumption tax that is placed in a product when
a value is added each stage of the product supply chain process. Value added tax is that cost
that the user pays for the product less withy the materials used in the products that has been
taxed.
Khomas region is one of the region of the country Namibia. This is a high plateau
region that has administrative unit (Gcabo et al., 2019). This region is famous for
transportation infrastructure. From the national policy commission report of poverty
mapping, it has been found that Namibia region has a serious decline din its economic
constraints. In 2017, the poverty was declined by 10%. In a national level. This report has
determined the seven poorest region of Namibia, out of this, Khomas region has been
declared as the least poor region of Namibia region (Nevonga, 2017). The most important
region of poverty is due to lack of financial resources like material, employment, education
and health environment. The country had an established in the previous years. But, after
2014, the GDP was growing only at a normal rate of 5% and this is because a least range of
regional disparities are present in the Khomas region.
Figure 1: (Namibia’s Poverty Rate)

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Taxes was always the primary source of revenue earn in any country. Nearly, 90% of
the taxes comes from public revenue. The other non-tax revenue comes from development
partners and other firms. Tax on income was the major source of income. The income tax
includes taxes from salary of an individual, taxes from corporate income and other income
from public industries. Value added tax is also the major source of income from goods &
services. Value added tax generated by an economy is nearly 90 percent of the overall tax
income of a country (npc.gov.na. 2020). Restructuring & improvements in civil servant
services also helps in boosting the Value added tax. Khomas region is the capital of the
country but still it is poorer. It is has a total population of 16.2 percent. The region has a low
poverty level as compared to other seven region. There is only 1% increase between the years
2001 & 2011. It has been found that, Khomas region has gained maximum of its value added
tax. The region has done invested more in doing start-ups. This region delivers the maximum
economic capital to the country. The region has a strong opportunity of job market among all
the region.
Khomas region is involved in various manufacturing activities like meat processing,
beverages, clothing, furniture’s, plastic packaging charcoal and other manufacturing activity.
Therefore, the value added tax has been incurred in each stage of the manufacturing activity.
The region is also involved in trading activities. Windhoek is a new motor trade that is the top
most service sector of the region. It is also involved in other telecommunication services,
tourism, transport and companies in the country. Therefore, tax is included in each & every
stage of the production & services process of the region. Value added tax has been
successfully implemented in the region due to effectiveness of the production & services
process of the region. Value added tax had positively affected the trading activity of the
country. The capital assets, components, utilities and the raw materials are subjected to Value

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added tax in the manufacturing process (Brandt, 2019). Therefore, Value added tax has
played an important role in boosting the economy of Khomas region.
Answer to the requirement 2
Forensic accounting is a type of investigative skills that uses accounting, auditing and
along with these skills to analyse, interpret and summarise the complex matters of the
business. It also deals with the financial matters. The accountants are basically involved in
the insurance companies, banks, government agencies and other accounting firms. Forensic
accounting helps in dealing with the real business situation (Eisenberg, 2018). This is widely
used to solve the fraud cases in the financial situations of the business. It is involved in
identifying the asset recovery, tracing the funds and asset identification process. It helps in
explaining the nature of the financial crimes engaged in the financial activity of a company.
In several of the financial sectors, the fraud activities are continuously growing in the
employee, managerial & financial service activity of the company. Therefore, accountants are
given training to recognise these crimes that can prevent themselves from fraud activities.
Forensic accounting is such accounting that investigate the legal matters (Crain, et al., 2018).
The main goal of this accounting system is to improve the financial reporting process of an
organisation (Hegazy, Sangster & Kotb, 2017). This accounting system uses accounting
principles, facts and theory to support the legal matters. They are involved in the following
activity:
 Whether there is any mistakes in the financial statements of the company.
 Whether there is material misstatements or errors in the report.
 The fraud activities involved during the financial reporting process.
 There is any money laundering.
 There is any distortion of data or information.

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They involve research and analytical skills to address the financial issues. They
interpret the findings to clearly understand the evidence.
Role of forensic accountant
The accountants and the auditors classifies the financial transactions and identify any
illegal profit gained by the suppliers and the buyers. The forensic accounts are divided into
auditors, court experts, commercial accounting forensics and many more. The role of forensic
accountants is to check and evaluate the business risks to prevent from any type of fraud
activities. Based on credible evidence, they are involved in finding the reason for undergoing
fraud activity. They analyse & detect the unfair and untrue financial reporting activity in an
organisation.
Procedures for forensic accounting
The analytical procedures used in forensic accounting focus on three most important
primary objectives:
 The first objective is to detect the risks related areas.
 The second objectives is to find the evidence and analyse the data.
 The third objective is to make conclusions on the impact of these unfair transactions
in the financial statements.
Forensic accounting uses various techniques like horizontal analysis that compares the
current findings with previous year results, vertical analysis that compares the percentage of
individual elements in the financial statements like percentage of revenue, percentage of
expenditures (Kramer, Seda & Bobashev, 2017). It also uses ratio analysis method,
comparison of individual items of financial statements with its historical performances.
Some of the manipulations done during the audit process are:

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 Incorrect statements for making the business decisions.
 Unawareness of an individual’s present data.
 Material misstatement in the financial statement.

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References
(2020). Retrieved 23 February 2020, from https://www.npc.gov.na/?wpfb_dl=225
Brandt, N. L. (2019). Urban resilience and sustainability challenges: a case study on the City
of Windhoek (Doctoral dissertation, Stellenbosch: Stellenbosch University).
Crain, M. A., Hopwood, W. S., Gendler, R. S., Young, G. R., & Pacini, C. (2019). Essentials
of forensic accounting. John Wiley & Sons.
Eisenberg, P. (2018). Application of the net worth method in forensic accounting
investigations. International Research Journal of Multidisciplinary Studies, 4(10), 1-
23.
Gcabo, R., Moche, B., Steyn, W., Moahlodi, B., Pirttilä, J., Noble, M., ... & Masekesa, F.
(2019). Modelling value-added tax (VAT) in South Africa.
Hegazy, S., Sangster, A., & Kotb, A. (2017). Mapping forensic accounting in the UK.
Journal of International Accounting, Auditing and Taxation, 28, 43-56.
Kramer, B., Seda, M., & Bobashev, G. (2017). Current opinions on forensic accounting
education. Accounting Research Journal.
Nevonga, P. T. (2017). An investigative study on the growth and success of small and
medium enterprises (SMEs) in the construction industry in Ondangwa and
Ongwediva (Doctoral dissertation, University of Namibia).

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