President Hage Geingob announced on Monday the introduction of a solidarity tax in the next budget that would require Namibians earning above a certain threshold to make a contribution towards a fund planned for poverty eradication activities.
President Geingob has so far earned praises for his determination to send poverty packing, and a number of efforts in this regard have been visible in recent weeks. And while we support all the activities implemented so far, we beg to differ with the introduction of new taxes, especially those affecting earnings of individual citizens.
The intensification of Namibia’s all-out war on poverty must not claim unintended casualties. A solidarity tax, if looked at from the opposite end, could prove contrary to the very aspiration of creating wealth among the citizenry.
Already, personal income tax is applicable to the total taxable income of an individual and all workers are taxed at progressive marginal rates over a series of income brackets. A 15% value added tax (VAT) is applicable to almost every commodity, with the exception of basic goods like sugar and bread.
The working class has for decades carried this country on its shoulders and government must, in fact, provide relief for the average working Namibian. Piling more taxes on individual citizens would actually impoverish the affected people, and not lift them out of poverty, as is the stated aim.
Currently, income tax in Namibia is charged between 18 percent and 37 percent. Add to this the taxes paid for airtime recharge vouchers, fuel, beer and other consumables and you’d realise just how draconian our country’s tax regime is.
Yes, no one ever said the fight against poverty would be a walk in the park. There would be hard work, patriotism and a swathe of compromises, but such must not include pushing income-earners into poverty and a debt trap.
Our country would need to come up with a multitude of poverty eradication interventions, but such interventions must not contradict each other. We must not rob Peter to pay Paul, insofar as fighting destitution is concerned. We can’t take wealth from one hand and place it into the other and think we are marching towards a generation of economic freedom for all.
Just over a week ago, the German government and European Commission were said to have held informal talks about a type of European solidarity tax to help cover the costs of stemming a record-breaking influx of asylum seekers. The plan was rejected in its infancy, forcing Steffen Seibert, the German government’s official spokesperson to issue a statement in which he said there were no plans to introduce additional taxes.
That is Germany, Europe’s largest economy, where citizens have far better living conditions and enviable social safety nets. Namibians must unite in their thinking of what alternative sources of revenue can be pursued in order to raise adequate funds to fight poverty.
This is a noble fight whose successful completion could place this country on another level. However, we must ensure that we do not disadvantage some citizens in our urgent quest to empower others.