Focus on Budget 2014/15 – Private sector views on national budget

Home Business Focus on Budget 2014/15 – Private sector views on national budget

WINDHOEK – There is a need for Namibia to start diversifying its revenue sources and reduce reliance on the Southern Africa Customs Union (SACU) receipts. Further, the finance ministry needs to address the hiccups in the refund of Value Addition Tax to businesses, which currently takes long and thereby hurts business. These were some of the concerns raised at a public discussion on the national budget for 2014/15 between members of the private sector and the Minister of Finance Saara Kuugongelwa-Amadhila. 

James Cumming, Head of Research at Simonis Storm Securities, emphasised the need for the government to diversify its revenue sources as future adjustments to the SACU revenue formula could lead to lower revenue from this agreement, saying “35 percent to 40 percent of tax revenue is from SACU.”

The minister responded by reminding the panel that the inland sources of revenue have been increasing and are expected to continually grow. She further stated that new sources of revenue have been identified with preliminary studies already underway in order to secure a consistent revenue stream in future.

Leonard Kamwi, Head of Advocacy and Research at the Namibia Chamber of Commerce and Industry (NCCI), was disappointed that previous budgets had failed to reconcile expenditure on education with the resulting output which has been below par. He also said it is not sufficient for the government to target sectors wholesomely but rather to target the prospective beneficiaries. “The budget should target specific necessary skill sets as opposed to the whole sector”, said Kamwi.

CEO of the Namibia Chamber of Commerce and Industry, Tarah Shaanika, stated that the government’s concerted efforts on housing and sanitation were positive. He however stated that within the private sector, access to land was a prominent issue for businesses. He said that despite government’s successes in improving tax collection, several business are still facing challenges that arise from the slow process of refunding VAT claims.

On the topic of tax Kuugongelwa-Amadhila defended the export tax, arguing that it is meant to minimise the disparities that arise from the exploitation of Namibia’s natural endowed resources. The revenue generated through this form of tax is meant to enhance public service delivery while ensuring that Namibians truly benefit from the wealth of the nation.

Certain analysts stated that there have been considerable allocations towards wage increases for civil servants and sought justification. The minister stated the increases were necessary to ensure that government offers market related wages therefore attracting and retaining skilled workers who are currently lacking in government offices.

Kuugongelwa-Amadhila also highlighted logistics development as an NDP 4 priority, stating that proper road and rail network facilities are crucial in order to support the port of Walvis Bay as a true transportation hub for the region. She stressed that she was not pleased with lack of skills, which as a result made capital utilisation low within sectors like agriculture.

The event was organised by KPMG, the NCCI, Prime Focus and Simonis Storm Securities for the private sector to contribute to and challenge the allocations of the budget based on its overall implications on consumers, business and the Namibian nation as a whole, in light of the developmental agenda.



By Staff Reporter