Catherine Sasman
29 March 2004
Windhoek — Tax revenue remains the major contributor to the total government revenue, contributing more than 90% of the total revenue during the last financial year.
Minister of Finance, Saara Kuugongelwa-Amadhila, on Wednesday said that this scenario was unlikely to change for the foreseeable future, despite a gross reduction of N$1.2 billion on the 2003/04-tax revenue.
For this reason, she argued, efforts are underway to tighten and sharpen tax collection and tax administration in order to improve tax revenue even further.
No income tax changes, however, were announced in the budget speech for individual taxes. Corporate taxpayers will have to gear up for transfer-pricing legislation to be introduced shortly.
During last year an increase in the income tax threshold for individuals from N$20 000 to N$24 000 have been affected, as well as a reduction in tax rates across all income groups. A reduction and simplification in transfer duties has also been effected.
This financial year will see the introduction of the anti-avoidance rules to address transfer pricing and thin capitalization, and the introduction of a tax tribunal to handle "lower value" tax cases.
In the same vein, said Minister Kuugongelwa-Amadhila, adequate audit capacity in government to combat tax evasion will be addressed with urgency.
The groundwork is also being prepared for the operationalisation of the impending land tax. "We [the Ministry of Finance and Ministry of Lands, Resettlement and Rehabilitation] are developing the required legislation amendments to the tax laws and I am confident that during the second half of this year we should start billing landowners," Kuugongelwa stated.
Biting increases in taxes on excise duties have also been announced on luxury goods. For cigarettes an increase of 16.6% has been announced. The prices of cigars and pipe tobacco will also increase by 15.7% and 17.3% respectively.
Pricing on alcoholic drinks has also been increased substantially. Natural unfortified wine will be increased by 30.7%, sparkling wine by 28%, and fortified wines by 16%. Spirits will go up to 13.5%, clear and malt beer by 9%. The price for alcoholic fruit beverages will be increased by 7.1%.
As in accordance with the Southern African Customs Union (SACU) agreement, these prices will be deemed to have taken effect as from 18th February this year.
No change to Value Added Tax (VAT) was announced.
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