“Reimagining a better future for the youth.”
The national budget speech tabled on 24 February 2022 by Honerable Iipumbu Shiimi, Minister of Finance, focused strongly on improving the economy and the livelihoods of Namibians, with a strong focus on the youth. The Budget allocation strongly reflected this. See full details below.
“Overall, the budget deficit for FY2021/22 is expected to stay unchanged at 8.6 percent of GDP. By the end of January 2022, the total debt stock stood at N$124.8 billion or 66.7 percent of GDP. At this point, 94 percent of the financing requirement for the financial year has been successfully met.” Honerable Iipumbu Shiimi, Minister of Finance.
Tax Incentive Program:
A further ITAS Tax relief program in a modified form, not offering the same concessions as the programme, which ended on 31 January 2022, will be introduced. The new program will probably have the same qualification requirements.
- The Ministry of Education, Arts and Culture is allocated N$14.1 billion,
equivalent to 19.9 percent of the budget.
- The Ministry of Higher Education, Training and Innovation receives N$3.3 billion
- Ministry of Health and Social Services will receive N$8.4 billion
- Sports, Youth and National Service has been availed N$330.9 million
- A total amount of N$67.9 billion has been earmarked to the economic sector
- Public Safety and Order sector has been allocated N$12.6 billion
- N$3.6 billion has been allocated to the infrastructure sector
- An allocation of N$3.7 billion is made to the public administration sector to
Support effective governance and efficient administration of the public sector.
A direct extract from the budget statement for the financial year 2022/2023
In terms of the SACU Agreement and taking into account sales volumes and
targets set for the total tax burdens on respective excisable commodities, the
following increases, effective from 23 February 2022 have been announced:-
- A 340ml can of beer or cider will cost an extra 11c,
- A 750ml bottle of wine will cost an extra 17c,
- A bottle of sparkling wine will cost an extra 76c,
- A bottle of spirits will be N$4.83 more expensive,
- A packet of 20 cigarettes will cost an extra N$1.03,
- A 25 gram of piped tobacco will cost 37c more, and
- A 23 gram cigar will cost an extra N$6.77.
Proposed Tax Amendments:
Whilst the Minister has confirmed that the implementation of tax proposals as per the 2021 Draft Income Tax Bill will be delayed to assist the economy, the following are planned:
Introduction of a local withholding tax on dividends;
- Deeming provisions which will tax trusts on the same basis as a company;
- Reduction of the non-mining corporate tax rate;
- Collection of a freight tax;
- Review of the withholding tax on interest by Unit Trusts
No reduction of mining company tax is mentioned. South Africa has reduced its corporate tax rate to 27% and Botswana is at 22%. Therefore Namibian mining companies are at a competitive disadvantage.