Government expected to give assurance on tax regime stability

24 Feb 2016 17:30pm
WINDHOEK, 24 FEB (NAMPA) – The government is expected to give assurance on how it will ensure stability in the country’s tax regime, as it appears to be very dynamic and unstable, a local financial expert says.
Mally Likukela, Standard Bank Namibia’s Manager for Economic and Market Research, told Nampa on Tuesday that the idea of an unpredictable tax announcement is bad for business and investment, thus Government has to be certain and predictable with a taxpayer-friendly tax regime to discourage evasion.
He said this in view of Minister of Finance, Calle Schlettwein’s tabling of the 2016/2017 National Budget in Parliament on Thursday.
Responding to an enquiry for analysis on the soon-to-be-tabled-budget, Likukela said the first ever Mid-Term Budget Review tabled in November 2015 provided a dose of transparency to the whole budgeting process, because it provided the nation with a sense of direction as to what Government will do following the short assessment of its achievements late last year.
“So in a way, the upcoming budget announcement is more predictable than the previous ones. I, for one, expect a growth-oriented and predictable budget that will stem from the already laid down growth strategies. We will ask for more clarity on what the exact Government road map is.”
Likukela is hopping that Schlettwein delivers a budget that rides on output of the positive economy growth seen in 2015, meets the key Government programmes on poverty eradication and an all-inclusive economy, while balancing the fiscal deficit.
He said Government still owes the public proper information about the proposed solidarity tax on wealth and how the money will be spent.
“People are still awaiting the exact plan of action directly linked to solidarity tax as a key arsenal in its fight against poverty and its subsequent eradication.”
During the Mid-Year Budget review in November 2015, Schlettwein announced that the government is investigating the feasibility of introducing the solidarity tax. This announcement was, however, was not received well by many members of the public, despite the minister placing emphasis on how it would be a temporary measure geared towards equality and wealth redistribution.
Schlettwein was quoted as saying the tax will be payable by all individuals in the tax-paying income bracket and all registered companies as a citizens’ response to the national fight against poverty.
During the public discussion on solidarity tax on 17 February 2016, Schlettwein explained solidarity as a means of displaying empathy towards the poor in a meaningful manner.
“We conceive solidarity tax to imply that those who have reasonable means of income should contribute to the fight against poverty and the welfare of the poor,” the minister said at the time.
He added that the end objective of solidarity tax is to lift the poor out of poverty over time, while the level of the contribution should be least distortionary and strike a balance between the ability and the willingness to pay.
Schlettwein said solidarity tax is an added element in Government’s toolkit to reinforce the national response to the accelerated reduction and eradication of poverty.
(NAMPA)
ME/LI/ND