15 January 2018

Namibia: Govt Spends More but Collects Below Target in 2016

THE government failed to meet its revenue collection targets during the 2015/16 financial year, collecting N$6,7 billion less than the target set.

This was reflected in the latest audit report on government's accounts and financial statements for the 2015/16 financial year submitted to the National Assembly from the Office of the Auditor General late last year.

The report stated that although combined revenue of N$48,9 billion was generated during the financial year, government fell short on tax collection for the year under review with about N$6,7 billion less than the set target of N$55,6 billion.

Government also recorded a reduction in marginal tax contributed to the collection during the year under review from taxes charged on income and profits on individuals with N$4,4 billion less than the targeted N$15 billion, despite spending heavily on salaries for civil servants.

According to comments contained in the report, the finance ministry's permanent secretary, Ericah Shafudah, said the N$6,2 billion revenue shortfall was due to the "unanticipated market forces in the economy" experienced during the year under review.

She added that salary increments also played a part, since the increments did not result in individuals saving more with commercial banks "because prices of commodities went up, which made it difficult for individuals".

Apart from a failure to collect taxes, government's expenditure for 2016 also indicated that more money still goes towards the operational budget, specifically towards the public wage bill.

About N$52 billion of the N$63,2 billion total budget for the year was spent on operational expenditure, which represents over 80% of the total budget, while only N$10,7 billion was spent on developmental expenditure.

This shows that the operational expenditure increased with 8% from the previous year, while the developmental expenditure decreased with 57%.

Of the N$52 billion spent on operational expenses, about N$24 billion was spent on personnel expenditure for just over 100 000 civil servants for that financial year.

The personnel expenditure is money spent on staff remuneration and other related benefits such as contributions to the staff pension fund, social security, and the improvement of the remuneration structure, amongst others.

The personnel expenditure remains a concern for external auditors, with rapid increments recorded from 2009 to 2014, from about N$7,8 billion in 2009/10 to N$21,6 billion in 2014/15.

Despite several complaints from the public and attempts by the Office of the Prime Minister to cut the bloated public wage bill, the personnel expenditure paid out by government continues to be high.

The Namibian reported last year that Prime Minister Saara Kuugongelwa-Amadhila hinted that government was considering reducing the voluntary retirement age limit from 55 to 50 years as one of the cost-cutting measures to reduce the public wage bill.

Government also started freezing recruitments for vacant positions in the public sector last year in an attempt to contain the ever-increasing costs to government on salaries for civil servants.

However, The Namibian also reported earlier last year that the public service is expected to grow to about 130 000 within the next three years.

Budget projections for the next two years indicate that the public wage bill is expected to increase from the N$28 billion expected to be spent during the current financial year (2017/18) by over N$800 million.

The adjustments will be N$300 million for the 2018/19 financial year, and N$500 million in the 2019/20 financial year.

Apart from personnel expenditure, government also spent N$17,7 billion on subsidies, grants and other transfers, and over N$1,6 billion on the acquisition of assets.

Another N$8,5 billion was spent on goods and other services, including travel and subsistence expenses, material and supplies, utilities and property rental and related charges.

Government furthermore spent about N$6 billion of the N$10,7 billion directed to the developmental budget on construction, renovation and other improvements on government buildings.

Namibia

Workers' Union Fails to Pay Salaries

NATIONAL Union of Namibian Workers' employees have dragged the organisation to the labour commissioner for failing to… Read more »

See What Everyone is Watching

Copyright © 2018 The Namibian. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 700 reports a day from more than 140 news organizations and over 500 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.