New Era (Windhoek)

13 June 2012

Namibia: Paying Tax Should Not Be a Burden

Windhoek — Minister of Finance Saara Kuugongelwa-Amadhila says paying tax should not be a "burden".

She said tax is collected in support of economic growth and development.

"Taxes fund the socio-economic programmes carried out as part of the re-distributive function of government," she said, explaining that for every dollar in taxes paid, people get something in return.

Kuugongelwa-Amadhila was speaking on Monday at the opening of a two-day Public Finance Management workshop underway in the capital.

She said that some taxpayers view tax as an "unnecessary cost" and will do anything to avoid paying it.

"Government has the responsibility to make available services such as education, health, transport infrastructure, police and defence services, amongst others. All these services represent a cost for government, such as books at schools, medicine at clinics or repair of public buildings that have been paid for," she explained, adding that the money has to be raised through taxes or through the borrowing of money locally or abroad.

She said non-Southern African Customs Union revenue averaged around 18 per cent of the Gross Domestic Product (GDP) since Independence up to the end of the current Medium Term Expenditure Framework period (2014/2015).

It however gradually started to dwindle below that average since 2003/04 and reached an alarmingly low rate of 13,8 per cent in 2007/08 at the height of the global financial and economic crisis.

Since then the situation has rapidly improved and in 2011/2012, non-SACU revenue amounted to close to 20 per cent of GDP.

"We must also find new sources of tax revenue to stop the gap in the light of the anticipated SACU revenue decline. It is for this reason that I am currently not a very popular person amongst the private sector community," Kuugongelwa-Amadhila noted.

The minister went on to say that government is continuously reviewing existing tax legislation to ensure that the tax burden is shared equitably by all taxpayers, taking into account the extent of poverty and historically unequal income distribution.

Tax reforms are also necessary to stop loopholes in the system, which are detected by tax advisors.

The minister further explained that the ability of government to design and implement a tax system relies heavily on the capacity of the Receiver of Revenue to administer and collect the tax.

"We are addressing the known shortcomings in our tax administration to avoid the collection of revenue impinging on the integrity of the tax system and any reform programme," she noted.

In addition, Kuugongelwa-Amadhila said there is also a need to simplify the tax system in order to make it easier for all taxpayers to comply with the requirements.

The workshop, which is being attended by Cabinet ministers, accounting officers, regional governors, councillors, local authority heads and officials from the Ministry of Finance, ends on Tuesday.

Nampa

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