14 Mar 2018 15:50pm
WINDHOEK, 14 MAR (NAMPA) Finance minister Calle Schlettwein said the increased tax rate for high earners and subsequent reduction in that of low earners was the implementation of the awaited solidarity wealth tax.
That is a solidarity action allowable in a progressive transact and we have amended the solidarity wealth tax. We have implemented it, Schlettwein said in an interview with Nampa recently.
He tabled the 2018/19 N.dollars 65 billion National Budget in the capital last week when the tax adjustments were announced.
The move described as a solidarity action, will see those in the low income tax bracket have their Individual Income Tax reduced from 18 per cent to 17 per cent while those earning between N.dollars 1.5 million and N.dollars 2.5 million annually, will be taxed 40 per cent.
He also pointed to the increased sin tax as a step in the right direction in achieving maximum yields from the affluent section of the society.
We have also taxed consumables that are mostly used by the affluent
that is luxury goods, alcohol, tobacco and fuels, he said.
Schlettwein added that to a certain extent, they believe the solidarity principle is captured by the new tax reforms.
Prices of malt beer, ciders and alcoholic fruit beverages and sparkling wine were increased by 10 per cent.
As for spirits, cigars, pipe tobacco, cigarette tobacco, cigarettes and unfortified wine, the increase is 8,5 per cent, whereas for fortified wine, the increase is 6 per cent.
The solidarity wealth tax is a key component in President Hage Geingobs governance blueprint - the Harambee Prosperity Plan (HPP).
Namibia is considered as one of the most unequal countries in the world, with a Gini-coefficient factor of 0.58, hence the tax is a wealth redistribution instrument.
Revenue collected through the tax is to be ring-fenced for developmental programmes, the HPP states.
Through the tax proposals and reforms for nation revenue purposes, Government anticipates to generate at least N.dollars 500 million during the current financial year.
Although heavily criticised, Government furthermore seeks to address the countrys income disparities through the New Equitable Economic Empowerment Framework (NEEEF). The refined draft NEEEF Bill will be tabled in Parliament this year.