New Era Newspaper

New Era Epaper
Icon Collap
...
Home / Shiimi promises no new taxes

Shiimi promises no new taxes

2020-05-29  Edgar Brandt

Shiimi promises no new taxes

Given the challenging economic landscape, comprised of sluggish business activity brought about by the Covid-19 lockdown, coupled with the prolonged recession, finance minister Iipumbu Shiimi on Wednesday said now is not the time to introduce new taxes.  
As a result, previously announced Income Tax and Value Added Tax proposals, such as a dividend tax for residents, taxation of trusts and subjecting income derived from commercial activities of charitable, religious, educational institutions under Section 16 of the Income Tax Act, introduction of VAT on income of listed asset managers, supply of sugar and mandatory requirement to issue tax invoices by VAT vendors, are still under review.  According to Shiimi, extensive stakeholder consultations will first take place before a decision is taken to proceed with these changes to Namibia’s tax regime.  However, Shiimi noted that specific tax administration measures will be pursued to achieve equity and fairness in the tax system by ensuring that economic agents generating the same level of income pay the right amount of tax at the right time. 

Measures will also be proposed to plug tax planning and tax avoidance opportunities. 
“This means, fellow Namibians, that those who earn above the tax threshold (N$50 000) or more per year, must pay commensurate tax irrespective of the type of economic activity from which they derive their income. The money is needed to pay for medicines, school books, construction and maintenance of roads and other critical public goods and services that the public enjoys,” said Shiimi when tabling the national budget this week.  

However, Shiimi stated that the previously announced proposal to disallow tax deductibility of royalties for mining entities has been withdrawn. This, he said, was done to encourage investor confidence and economic agents to explore, produce and reinvest in Namibia. 
Meanwhile, the finance minister noted that the Income Tax Act proposals to repeal the provisions of the Export Processing Zone Act, which deal with tax exemptions on corporate income tax and the phasing out of tax incentive for manufacturers and exporters of manufactured goods, were passed by parliament last year. 

“The phasing out of these base-eroding tax exemptions will be replaced by the introduction of the Special Economic Zones.  These changes are due for implementation starting this year, with grandfathering provisions,” said Shiimi. 
In addition, while a number of increases have been confirmed on respective excisable commodities in terms of the Southern African Customs Union revenue sharing agreement, Shiimi noted that the current national ban on the sale of alcohol products due to Covid-19 saves consumers from these “sin” taxes at the moment.  But the finance minister warned that key tax administration reforms will be implemented during the FY2020/21 and over the medium-term. These include; Implementing the transitional arrangements for the establishment of the Namibia Revenue Agency by commencing with the recruitment drive; Improving the tax administration to ensure compliance with tax laws and, improving the efficiency of domestic tax collection, assessment and forensic audit; Improving the functionality of the Integrated Tax System to leverage service innovation embedded in the new system; and Leveraging regional and international tax cooperation.
“Namibia’s fiscal policy remains grounded on the promotion of socio-economic development, social welfare and intergenerational equity in the context of fiscal sustainability,” said Shiimi. 

Sin taxes 
In terms of the SACU Agreement and taking into account sales volumes and targets set for total tax burdens on respective excisable commodities, the following increases will be effective from 27 February 2020 as agreed upon in terms of the SACU Agreement: 
•     A 340ml can of beer or cider will cost an extra 8 cents
•     A 750ml bottle of wine will cost an extra 14 cents 
•     A 750ml bottle of sparkling wine will cost an extra 61 cents   
•     A bottle of 750 ml spirits, including whisky, gin or vodka, will rise by N$2.89 
•     A packet of 20 cigarettes will cost an extra 74 cents  
•     A 25gm of piped tobacco will cost 40 cents more
•     A 23gm cigar will cost an extra N$6.73 


2020-05-29  Edgar Brandt

Tags: Khomas
Share on social media