Banner Left
Banner Right

Budget: No need to tighten your seatbelt predict experts

Budget: No need to tighten your seatbelt predict experts

ECONOMIC experts do not expect any major surprises when the national Budget is tabled in the National Assembly in Windhoek today.

However, it is widely expected that Finance Minister Saara Kuugongelwa-Amadhila will follow South Africa, which increased the “sin” taxes for alcohol and tobacco. In terms of Government’s own three-year expenditure estimates, Kuugongelwa-Amadhila would table a budget with a total expenditure amounting to about N$14,7 billion.However, it is expected that a windfall from the Southern African Customs Union (SACU) could push the budget beyond the N$15 billion mark.Economist Emile van Zyl, predicts that there will be a small budget surplus, mainly because of the extra income from SACU.”The budget tabled in South Africa last month indicated that South Africa would pay a couple of billion more into the SACU revenue pool which is shared with Namibia, Botswana, Swaziland and Lesotho according to a formula.”Last year, Kuugongelwa-Amadhila projected N$4 billion from SACU for the new financial year.However, according to Van Zyl this will be significantly boosted by the additional N$2,5 billion unexpected increase in the SACU revenue.”Other than that I expect an ordinary budget as usual,” Van Zyl added, “unless the Minister announces some tax relief, but I doubt that.”He said that the windfall from SACU could encourage Government to spend more on capital projects and on education.”However, spending should be careful as good revenue expected from the mining sector might not be too sustainable, since prices for copper, gold or uranium are unpredictable and could drop suddenly,” the economist added.Van Zyl urged that Namibia’s tax brackets should be reviewed.”Professionals in the higher salary scales pay much more tax in Namibia than they do in South Africa for the same salary, and that makes our country less competitive,” he added.The SACU revenue might decline considerably once the envisaged Free Trade Area (FTA) among SADC member countries starts next year.”Reduced tariffs and freer flow of goods across borders will lessen income to the SACU pool,” said economist Robin Sherbourne.”Government should seriously review taxation of individuals and companies in lieu of the dwindling income from SACU once the FTA comes and the windfalls don’t come anymore.”In terms of Government’s own three-year expenditure estimates, Kuugongelwa-Amadhila would table a budget with a total expenditure amounting to about N$14,7 billion.However, it is expected that a windfall from the Southern African Customs Union (SACU) could push the budget beyond the N$15 billion mark.Economist Emile van Zyl, predicts that there will be a small budget surplus, mainly because of the extra income from SACU. “The budget tabled in South Africa last month indicated that South Africa would pay a couple of billion more into the SACU revenue pool which is shared with Namibia, Botswana, Swaziland and Lesotho according to a formula.”Last year, Kuugongelwa-Amadhila projected N$4 billion from SACU for the new financial year.However, according to Van Zyl this will be significantly boosted by the additional N$2,5 billion unexpected increase in the SACU revenue.”Other than that I expect an ordinary budget as usual,” Van Zyl added, “unless the Minister announces some tax relief, but I doubt that.”He said that the windfall from SACU could encourage Government to spend more on capital projects and on education.”However, spending should be careful as good revenue expected from the mining sector might not be too sustainable, since prices for copper, gold or uranium are unpredictable and could drop suddenly,” the economist added.Van Zyl urged that Namibia’s tax brackets should be reviewed.”Professionals in the higher salary scales pay much more tax in Namibia than they do in South Africa for the same salary, and that makes our country less competitive,” he added.The SACU revenue might decline considerably once the envisaged Free Trade Area (FTA) among SADC member countries starts next year.”Reduced tariffs and freer flow of goods across borders will lessen income to the SACU pool,” said economist Robin Sherbourne.”Government should seriously review taxation of individuals and companies in lieu of the dwindling income from SACU once the FTA comes and the windfalls don’t come anymore.”

Stay informed with The Namibian – your source for credible journalism. Get in-depth reporting and opinions for only N$85 a month. Invest in journalism, invest in democracy –
Subscribe Now!

Latest News