• December 5th, 2020

Opinion - Economic recovery roadmap



Namibia is undoubtedly at the crossroads, facing an economic recovery puzzle, which requires urgent, but unique solutions to chart the correct direction for stabilisation, recovery, and growth. The challenge, however, is not only the correct solutions, but taking an effective and correct direction to the recovery path.  

With already a struggling economy prior to the Covid-19 pandemic and the obvious holding reality that the economy is now heavily compressed due to the effects of the pandemic that has resulted in massive job losses, there is critically a desired imperative from the leadership to begin to seriously interrogate the direction that is taken in dealing with the economic recovery efforts and strategies.      

Political energy, will, desire and commitment are substantially very evident from the leadership to do what is right, but there is a serious absence of an illuminating torch to support and guide the leaders to be able to see what ought to be used to chart an appropriate and effective economic recovery roadmap. While this political will is unquestionably supported by commitment, the challenge is that the political leadership is not receiving proper guidance and advice, but being baptised with orthodox economic literature and narratives.   
It is practically challenging, if not even impossible to revive an economy without first understanding the current model of the economy and particularly the tax structures that subsists within the model and dictating the functioning of the economy.  

Taxation structures and tax regimes have been used as silent weapons to collapse Africa economies, so as to generate public discontent and anger among the citizens, towards the political leadership, in order to advance and satisfy an external foreign policy agenda for a regime change. 

This experiment has not spared Namibia either.  Pre-Covid-19 economic shrinking circumstances may be overall attributed to the global economic downturn.  But local economic growth driven by persisting widening deficit funding from external sources instead of being accessed from the country’s own treasury reserves, should attract an interrogative instinct to establish, why the country has not been able to register surpluses in the collection of tax revenues to build up reserves over the last 30 years.   The presence of harmful tax structures in the Namibian economy has been the main prohibiting factor and still is the cause factor for the country not being able to collect sufficient tax revenues needed to grow the economy.  

Namibia’s case is peculiar in the sense that the tax structures were deliberately loaded into the country through interposed tax regimes in order to collapse the economy, disorient public trust in the leadership so as to advance the regime change agenda.  
To justify this as admissible knowledge-based fact, the economy is downgraded to a junk status, blacklisted for hosting a preferential investment regime, which is legislated under the EPZ.  In the meantime, government leaders are denied the critical knowledge to know the existence of other non-legislated economic crippling tax regimes, (hidden interposed tax regimes) that are even more harmful and collapsing the economy than the EPZ itself.      

Taxation regimes together with their accompanying tax structures are modern weapons that are used to collapse economies, effect political regime change, achieve generational land rights claim lockout and Namibia is under the microscope for all these due to tax expertise skills limitation.  

Let us examine the tax facts regarding the EPZ investment regime. The EPZ was a ring-fenced investment regime and government ought to have been advised that it is not acceptable in terms of the international tax compliance practices to administer a ring-fenced investment regime in the absence of a tax information exchange legal instrument.  

And so is the case with the Integrated Tax Administration System-(ITAS) implementation.  Despite, IT capacity limitations, ITAS is one of the best e-filling tax revenue administration and collection systems, but implementing ITAS in the absence of a taxation safeguard legal instrument is extremely harmful to the nation as the tax system has potential to be positioned to effect generational land rights claim lockout.  This essentially means that the next generation will be denied the right to land access, thus, rendering the principle of willing buyer and willing seller in the land distribution discourse, dysfunctional and place the whole programme on ice-cold forever. That is how dangerous taxation structures can be if not properly understood. Ignorantly, Namibia has, regrettably, already accommodated this invisible fishing hook, in her mouth. 

The country is now slowly being pushed to the stage of swallowing it.  Who is to blame for this? Is it the tax technocrats or the politicians? I wonder how the politicians can carry the blame for complicated technical tax issues which even the technocrats themselves do not seem to understand.    The role of technocrats is to advise state leadership in an effective and constructive manner.  
Taxation filling systems, (such as ITAS), multilateral and bilateral tax conventions, tax information exchange instruments, have to be implemented by assessing the model of the economy, the scopes of the treaties being administered and promulgating safeguard legal instruments as risk mitigation measures.     

Namibia’s economic recovery puzzle cannot be solved by sustained economic funded programme intervention as a priority. The secret master key to fix Namibia’s economy is found in a fiscal box, i.e. exhaustive tax policy reforms, both with domestic and international appeal.  Africa’s dilemma is capacity deficiency in taxation, lack of patriotism to share and expand knowledge. 


Staff Reporter
2020-11-18 07:11:30 | 17 days ago

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