SACU a key revenue stream for Namibia

15 November 2021 | Economics

Windhoek ∙ [email protected]


Finance minister Iipumbu Shiimi tabled the mid-term budget review earlier this month and proposed several policy reforms. Institutions have been analysing the revised budget.

In an interview with Business 7, Chantell Husselman, country senior partner at PricewaterhouseCoopers (PWC) noted that for the 2020/21 financial year (FY), about N$58 billion revenue was collected. For the current financial year 2021/22, about N$52 billion was expected to be collected, however, the revised revenue increased by 2.95% to N$53.6 billion.

The Southern African Customs Union (SACU) remains a key revenue stream for Namibia. According to Husselman, the revised revenue of N$53.6 billion is expected to be generated from various tax streams such as the Southern African Customs Union (SACU) (29.9%), individual tax (29.5%), Value Added Tax (VAT) (24.0%), company taxes (14.3%) and the remaining accounts for property and other taxes.

For the 2020/21 FY, Namibia collected about N$22 billion from SACU. The figure dropped significantly by 24% in both the initial and revised budgets for the 2021/22 FY to N$14.7 billion, she pointed out.

On the expenditure front, Shiimi reallocated funds from the development budget towards operational expenditure, a regular occurrence in past years.

The operational budget is increased by N$2.2 billion from N$53.9 billion to N$56.1 billion, while the development budget is reduced by N$279.8 million from N$5.5 billion to N$5.2 billion.

The increased expenditure increased the revised budget deficit by 1.20% from N$15.8 billion to N$16 billion, Husselman said.

Foreign debt stood at N$93.7 billion in the initial budget and was revised to N$94.8 billion, while domestic debt will remain stagnant at N$32.8 billion. Given these developments, the revised debt to gross domestic product (GDP) ratio increased from 68.5% to 68.7%.

Reforms

Shiimi highlighted some key policy priorities such as the Special Economic Zone (SEZ) policy to offer investment incentives in order to pave a way to attract investors. Other policies include tax and wage bill reforms, small medium and enterprise (SME) financing facilities and investment in green hydrogen.

He further proposed an increase deductibility on pension fund contributions and educational policy deductions to a maximum of N$150 000 from N$40 000 per annum.

Also contributing to the discussion is Monique Cloete, managing director (MD) at Liberty Life Namibia who explained on how the proposal will impact the insurance industry and the economy as a whole.

She notes that the minister’s proposal is welcomed by the industry as the value of accumulation for retirement would be more for members, however, the affordability factor will be at play. For the economy, the proposal will lead to a growth in net savings for the country, Cloete pointed out.

She further explained that there is an advantage of contributing towards pension when a member is young as the requirements or rates would usually be low.

Commenting on the impact of the Covid-19 pandemic, she said the domestic economy was already in rough situation and the economic condition were worsen by the pandemic. Key economic sectors were at a standstill due to restrictions imposed to curb the spread of the virus.

“We witnessed retrenchments is the insurance industry and the economic effects were more that the mortality effects,” the MD said.

During 2021, there were more death claims which was triple compared to what they use to pay, she said. Lastly, Cloete concluded that vaccination hesitancy is one of the challenges facing Namibia as the uptake is the lowest in the region.

Similar News

 

Economic agents ‘reluctant’ on credit uptake

1 week ago - 04 January 2022 | Economics

Windhoek ∙ [email protected] Statistics released by the Bank of Namibia (BoN) indicated that private sector credit extension (PSCE) growth slowed to 1.7% year-on-year...

Breather for indebted consumer

2 weeks ago - 30 December 2021 | Economics

Windhoek • Jo-Maré Duddy Debt-ridden consumers, who owe commercial banks about N$62 billion, breathed a sigh of relief when the Bank of Namibia (BoN) said...

Trade misinvoicing: Namibia loses N$3.9bn annually

2 weeks ago - 28 December 2021 | Economics

Windhoek ∙ Ogone Tlhage Namibia lost US$152 million in trade invoicing imbalances against the world’s 32 biggest economies in 2018, and on average US$251...

Consumers are shark bait

1 month - 16 December 2021 | Economics

Windhoek • Jo-Maré Duddy Year-on-year (y/y), total debt owed to microlenders skyrocketed by 15.1%. In comparison, credit extended to the household sector by commercial banks...

Steady growth in house prices

1 month - 14 December 2021 | Economics

Staff Reporter The Namibian housing market appears to be at an inflection point, where pent-up demand and low interest rates are expected...

Investors spooked

1 month - 02 December 2021 | Economics

Windhoek • Jo-Maré Duddy If government gets its way, the Investment Promotion and Facilitation Bill will become law this week, giving the trade...

Rental index growth flatlines

1 month - 01 December 2021 | Economics

Although rental markets across most advanced economies are on a path of recovery due to the resumption of “normal life”, improved pace of Covid-19 vaccination...

Renewable energy transition requires investors

1 month - 30 November 2021 | Economics

Windhoek • Phillepus Uusiku Namibia has the world’s second highest solar irradiation regime, high wind power potential and potential for geothermal and bioenergy developments....

Telecom, CRAN reaches agreement on levies

1 month - 28 November 2021 | Economics

Staff ReporterThe Communications Regulatory Authority of Namibia (CRAN) and Telecom Namibia Limited reached a settlement agreement, closing a longstanding dispute on the legality of regulatory...

Significant improvements in the mining sector

1 month - 23 November 2021 | Economics

Windhoek • [email protected] The local mining industry underwent significant amount of investment last year in order to expand operations, implement care and maintenance and...

Latest News

The Audi Q5, SQ5 Sportback

14 hours ago | Motors

Following the Q3 Sportback and the e-tron Sportback, Audi now presents its third crossover utility vehicle, the first-ever Q5 Sportback. This coupé with dynamic lines...

Drones delivering to your doorstep

14 hours ago | Technology

Windhoek • [email protected] Namibia will most likely start using drones to deliver medicine to remote locations within the next few weeks.This comes after a...

More than the absence of...

14 hours ago | Health

Ideally, it is a state of mental well-being in which people cope well with the many stresses of life, can realize their own potential, and...

Suspected avian flu being investigated

2 days ago - 14 January 2022 | Environment

Swakopmund • [email protected] Following a major outbreak of avian influenza in South Africa’s Western Cape a few months ago that killed almost 25 000...

Taxi-tariff guide gives legal footing

2 days ago - 14 January 2022 | Infrastructure

Walvis Bay • [email protected] The recently published taxi-tariff guide by the Namibia Bus and Taxi Association (Nabta) to accompany the official taxi-tariff hike...

Boggelrugwalvis spoel uit

2 days ago - 14 January 2022 | Picture of the day

'n Boggelrugwalvis het gister laatmiddag by Langstrand Uitbreiding 1 tussen Swakopmund en Walvisbaai uitgespoel. Volgens 'n inwoner het die dooie walvis met laegety teen 'n...

Van Walvis tot wêreldklas animasieregisseur

2 days ago - 14 January 2022 | Art and Entertainment

Windhoek ∙ [email protected] Die Namibies gebore Reginald Amukoshi Emvula was een van die regisseurs van die animasiefilm Encanto wat Maandagoggend die Golden Globe-toekenning vir...

Maybe I was wrong –...

2 days ago - 14 January 2022 | Police

Windhoek ∙ Mathias Haufiku Police chief Sebastian Ndeitunga yesterday said he might have acted ‘ultra vires’ when he issued an internal memo to...

Shangula lambasts anti-vaxxers

2 days ago - 14 January 2022 | Ministries

Health and social services minister Kalumbi Shangula has implored vaccine sceptics to abandon the anti-vaccine campaign and to join the nation to successfully fight Covid-19...

Load More