Government unlikely to cut rates in this budget: Analyst

18 Feb 2014 17:40pm
WINDHOEK, 18 FEB (NAMPA) – Government is unlikely to cut rates in this year's budget, neither will it reverse tax cuts introduced in last year's budget, a local financial analyst has said.
“We can even expect another tax cut since Namibian tax rates are still higher than those of our neighbours, being South Africa and Botswana.
But, this will only be a possibility provided that the independent revenue authority improves revenue collection substantially,” said Capricorn Asset Management Assistant Portfolio Manager, Patrick Britz in an interview with Nampa on Tuesday.
Britz said revenue-collection may be possible after the Independent Revenue Authority is set up and in full operation.
His comments are in view of the National Budget to be tabled here on Wednesday.
Britz said he does not expect any surprises in the National Budget, but speculates that Government will not introduce other cuts in tax rates.
As per tradition, under Public Finance Management Act Number. 1 of 1999, Chapter 4, Section 27, finance minister Saara Kuugongelwa-Amadhila will once again table the annual budget for the 2014-2015 financial year in the National Assembly on Wednesday.
In addition, Britz said it is quite possible that government could use further ‘sin-tax’ measures to curb the spending on alcohol and tobacco.
He explained that the last national household income expenditure survey ‘paints a scary picture’ of how much the average Namibian spends on alcohol and tobacco.
From this budget, Britz said, he expects an increase in the allocation received by the Ministry of Regional, Local Government, Housing and Rural Development to fund the State’s mass-housing project.
“It is unclear how the government would seek to fund the ambitious mass-housing initiative, however it seems that it will creep into Government expenditure at least in the initial stages. However, the extent of this remains a mystery,” he stated.
With this being an election year, he would not be surprised if the budget comes out expansionary and significantly larger than last year.
“From the budget, we expect the three largest allocations, being the Ministry of Education, Ministry of Health, and the Ministry of Defense, to remain unchanged,” said Britz.