The long-awaited operationalisation of the Namibia Revenue Agency has finally come to fruition, heralding a new beginning as far as revenue collection is concerned. NamRA was established as a solution to the perrenial and low revenue collection problem the country has been experiencing for many years.
NamRA was established against Namibia’s record of an already high revenue-to-GDP collection rate by the government, averaging 32% of GDP when Southern African Customs Union (SACU) receipts are included, or some 22%, excluding SACU receipts. In both instances, this is above the Sub-Saharan African average of 17% tax-to-GDP ratio and also compares well globally. This relative collection efficiency has enabled government to consistently invest in economic and social infrastructure, expand the coverage and quality of social safety nets and provide essential public services.
Now, this new agency has been given sufficient impetus and the necessary teeth to strengthen the country’s ability to collect much-needed revenues through taxes – a crucial aspect for the sound functioning of any country.
The semi-autonomous tax administration body is expected to significantly improve transparency in Namibia’s tax collection efforts to increase state revenue from the N$52 billion expected during the current fnancial year, which is already N$6 billion less than the N$58 billion collected during the 2020/21 financial year.
Being able to tax citizens and collect revenues efficiently remains a cornerstone of government survival amid heightened unemployment and a distressing combination of factors worsened by the virulent Covid-19 pandemic, which has threatened deep cuts to priority areas such as education, infrastructure and other important investments.
Indeed, there is a massive weight of expectation on the Sam Shivute-led NamRA to perform wonders, including ensuring tax evaders are consistently dealt with, within the parameters of the law.
Shivute is not new to tax administration as he was formerly seconded to head Inland Revenue whilst still in the employment of Bank of Namibia. The onus, however, is now on his dedicated team of professionals to see that there are marked positive changes aimed at improving the ability to collect outstanding tax revenue to help complement revenue raised by SACU and unfailingly meet or exceed targets.
While the bulk of the tax revenue the agency aims to collect is expected to come from personal income and corporate taxes, what is also important is that NamRA bosses exercise their functions without fear, favour or prejudice, including taking on those who are unable or unwilling to fulfil their tax obligations. There must be a spotlight on everyone, including errant business people, politicians and the well-connected, who occasionally get away with murder when it comes to paying over tax to the authorities.
We are mindful of the fact that it will not be all rosy, considering the pandemic continues to wreak considerable economic damage, which also impacts the effective collection of revenue.
However, Namibia is on a unwavering quest to eradicate extreme poverty, to end hunger, reduce inequalities and improve the quality of life for all and to achieve this these national objectives require substantial resource outlay and an integrated resource mobilisation strategy.
And, NamRA is critical in implementing this strategy to reform Namibia’s institutional capacity and responsiveness to the complexities of an increasingly integrated regional, continental and global economy.
In fact, NamRA’s capacity is best manifested not only in the ability to collect the right amount of tax fairly and at the right time, but also to enhance the efficiency of our overall tax system in relation to its objectives and to strike a fine balance between taxation and socio-economic development objectives.