Can Namra improve Namibia’s revenue collection?

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By Timo Shihepo

Windhoek - The Namibian government is hoping that the introduction of a new revenue agency would increase government’s revenue, which is highly needed to aid the country’s ailing economy.

In recent years, government’s revenue generation has been weak, which is outweighed heavily by government spending subsequently driving the economy into recession.  

To put it into context, tax revenue for 2018/2019 made up 93% of Namibia’s total revenue of R56 billion. Total revenue for 2018/2019 is 1.4% less than the budgeted amount of R57 billion. 

During the mid-year budget review tabled by finance minister, Calle Schlettwein,  the preliminary revenue outturn for 2019/2020 is R29 billion, being 50% of the budgeted revenue, and is about 2% better than the average half-year collection rate.

Revenue for the FY2019/20 is estimated to remain unchanged at the budgeted amount of R58 billion based on the half-year outturn, the downside risks on economic growth and the domestic and Southern African Customs Union (SACU) revenue streams.

Total revenue for 2019/2020 is projected to average around 29% percent as a proportion of GDP, reflecting the lagged effect of recessionary pressures, volatility on SACU revenues and the expected weak domestic economic growth.  The budget deficit for 2018/2019 was 4.8% of GDP, compared to the budgeted 4.5% due to lower revenue outturn.

In an effort to improve the revenue collection, government is in the process of creating the Namibia Revenue Agency (Namra) – with the aim of improving government’s revenue collection.

However, government has been struggling to implement Namra as its operational date has been shifted twice, first from March 2019 and again from October 2019.

Schlettwein admitted to the struggles saying that the process is complicated because the tax collection cannot be interrupted.

“We have to have the systems running until the last day and on the same day switch over to Namra system which will take over as the receiver of revenue of Namibia. Government remains committed to bringing Namra online within the current financial year,” he said.

The finance ministry is now earmarking March 2020 as the month when the agency will be operational.

“A number of milestones have been achieved, the Act (establishing the revenue authority) has been passed and gazetted. We have appointed the board and a commissioner has now been appointed.

“I am therefore pleased to announce that we have been assisted by the Bank of Namibia by availing the deputy governor Mr Ebson Uanguta to be appointed as the Commissioner of Namra. This will be an arrangement for the first six months to provide us with a chance to have the commissioner together with the board, develop the structure and staff recruitment.

“Thereafter Mr Uanguta will go back to his position at the bank and we will proceed with the recruitment of the commissioner. This is being done because the selection from the interview that was done did not meet all our requirements and therefore that process has to be redone. We are thankful for the Bank of Namibia to have assisted,” said Schlettwein.

Schlettwein added that the preparatory activities have been extended because of key dependency activities that have to be completed.

“I wish to reiterate that bovernment remains committed to the establishment of the Namibia Revenue Agency,” he said.

 

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